Latest BOE Inflation Report now out 11 May
- inflation peak revised from 2,75% in Q2 2018
- inflation May 2017 2.64% vs 2.72% prev f/cast in Feb
- 2 years time 2.20% vs 2.56% prev
- market interest rate assumption shows first hike fully factored in for Q4 2019 vs Q1 2019 in Feb f/cast
- 2017 GDP +1.9% vs 2.0% f/cast prev
- Q2 GDP growth of +0.4% qq
- expects Q1 to be revised up to +0.4% from +0.3%
- unemployment rate at 4.6% in 2 years time vs 5.0% prev
Initial reaction is lower pound on the inflation rate peaking this year and lower GDP f/cast.
Less chance of rate hikes as per my preview
GBPUSD down to 1.2874. EURGBP up to 0.8444 but pound finding some dip demand as the Minutes say tighter policy may be needed than yields imply but also saying the consumption remains a bigger problem than first thought due to weaker pound/higher import prices.
Be careful of what you wish for MPC. Brexit reaction was always going to be GBP negative and a lower pound never going to help matters however much you said it would.
Full report here
Watch the presser live here at 11.30 GMT
