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12 Feb 2014
Flash: GBP/USD eyes on UK Inflation Report - Danske Bank
FXStreet (Barcelona) - Kasper Kirkegaard, Chief Analyst at Danske Bank notes that in the UK the event of the week will be today’s Bank of England Inflation Report (IR).
Key Quotes
“The MPC has indicated that the forward guidance framework will be reviewed in the IR as unemployment has come down rapidly to 7.1%. Although a wide range of options are available (e.g. lowering the threshold to 6.5%, shifting to another target measure etc.), we expect a shift towards more qualitative guidance.”
“We believe the MPC will come to the same conclusion as the Fed and prefer softer communication instead of tying itself to a new measure. We would expect the general message to be that the economy still needs low interest rates, that the MPC sees no immediate need to raise rates and that, when time comes, the move higher will be very gradual.”
Key Quotes
“The MPC has indicated that the forward guidance framework will be reviewed in the IR as unemployment has come down rapidly to 7.1%. Although a wide range of options are available (e.g. lowering the threshold to 6.5%, shifting to another target measure etc.), we expect a shift towards more qualitative guidance.”
“We believe the MPC will come to the same conclusion as the Fed and prefer softer communication instead of tying itself to a new measure. We would expect the general message to be that the economy still needs low interest rates, that the MPC sees no immediate need to raise rates and that, when time comes, the move higher will be very gradual.”