Cable falls after the BOE decision
GBP/USD is down about 20 pips after the Bank of England rate decision.
Cable is trading at 1.3943 with the post-FOMC low of 1.3935 holding so far.
Gilt yields are up 6 bps to 0.889%, which is near a post-pandemic high but down from 0.909% at the pre-BOE high.
The market reaction suggests there were fears that language like Bailey used could find its way into the statement. Instead of saying higher yields were 'consistent' with the BOE view, the statement said this:
Since the time of that forecast, developments in global GDP growth have been a little stronger than anticipated, and the substantial new US fiscal stimulus package should provide significant additional support to the outlook. In part reflecting this and alongside positive news on some vaccination programmes, advanced economy longer-term government bond yields have risen rapidly to levels similar to those seen shortly before the pandemic. For the most part this has reflected higher real yields.
There was also plenty of talk about keeping policy loose.
Watch 1.3935 for clues on what comes next.
