Bank of England external policy member Alan Taylor is out with a strong call for holding rates unchanged. The market is pricing in a 25 basis point hike to 4.00% at year end.
- An extended hold at this level, to me, very much the correct and appropriately measured policy response we need
- Bank rate is 75 bps above my neutral level
- We enter this shock with a "very weak economy"
Those are some clear comments but aren't weighing on the pound, which is down 36 pips to 1.3211 in a reversal of yesterday's outperformance.
