The slim chance of a move became no chance
GBPUSD flipped around between 1.3200 and 1.3250 but is back pretty much where it started, bang in the middle.
The BOE have punted any possible action while acknowledging that things haven't turned out as bad as they expected and tinkered around with their reasoning that some parts of the economy would be more sensitive than others to heightened uncertainty. That's explained as they still see some weakness in investment but not as much in housing and consumption has held up.
Inflation is still expected to follow the path expected into 2017 but the path for the rest of 2016 may be a little lower than the said in the August report. That will go against their call that inflation could rise in the short-term after the vote.
Another cut is only likely to come if the August outlook is confirmed, and the way they have spoken today, that looks a 50/50 call right now.
If anything it could be slightly bullish for the pound, if only by the definition that there's nothing majorly different or more dovish here, and if the price ain't going to go down, then it only has one other way to go. Further out, we're in wait and see mode and will quickly change back to trading the FOMC.
