UK: Super Thursday Failed to Excite – Investec
Research Team at Investec, notes that ‘Super Thursday’ managed to bring
some momentum to the foreign exchange market yesterday, helping GBPUSD
break above 1.45 and GBPEUR break the 1.27 mark but gains were very
short-lived.
Key Quotes
“As had been expected the Monetary Policy Committee (MPC) voted to keep
interest rates and the stock of QE unchanged (Bank rate remains at 0.5%,
QE stock remains at £375bn). The MPC was unanimous (9-0) in its voting.
The Inflation Report showed the Bank of England (BOE) revising down
their forecasts for growth by one or two tenths in each of the next
three years while the inflation forecast saw little change generally but
slightly steeper in the near term.
Much of the focus though was the mention of the EU UK referendum vote.
The Inflation Report suggested that a vote to leave 'could lead to a
materially lower path for growth and a notably higher path for
inflation'. Governor Carney also warned of the possibility of 'material
effects on the exchange rate' and even the possibility of a recession.”
