In short, the inflation report hearing didn't provide any new developments
The hearing lasted for almost two hours and there was a lot of talk and comments from it, but the key takeaway is that the BOE will continue to be data dependent moving forward - and it's really no surprise.
The Treasury committee was very kind to be honest in their tone and questions considering how the BOE managed expectations of a rate hike in May and what a fiasco that turned out to be. But the BOE surely knows now that no matter how they angle the market's expectations, it's not going to matter if they don't get support from economic data.
The timeline of the comments today started from Vlieghe who touched on Brexit and how the MPC views that headwinds from Brexit will eventually fade and support the case for future rate hikes by the central bank. That gave sterling a bit of a lift, but then came Carney and Saunders who started touching on Q1 data and that pretty much kept the market in check.
Carney said that he doesn't expect much upside - if any - to a revision in Q1 data later this week, but Saunders on the other hand argued that the weakness could be "revised away". You just can't make this stuff up. To end, the committee questioned Carney on Simon Cowell's impact on the UK economy. And that's probably the most memorable question from the entire hearing. And yes, Simon Cowell - the judge of BGT.
There was no new signal and no new message from the BOE in today's hearing. So, all the market can rely on now for the next set of clues is economic data. Though the wait won't be long. Tomorrow we'll be getting inflation figures followed by retail sales on Thursday, and the second reading of Q1 GDP on Friday.
That should keep the week a bit lively for sterling traders.
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