BoE Dove Cunliffe A Little Less Dovish

Published date: 13/07/2018

Comments from BoE member Cunliffe erring on the side of hopeful in his latest assessment of the economy. He now aligns with some of his other fellow members in seeing the significant drop in growth in Q1 as 'largely an aberration', which most of the MPC put down to poor weather. There is also evidence of the growth path remaining intact according to the policy maker and that the economy is expanding at or a little above the potential rate of growth. 

Naturally, Brexit creates major uncertainty and this also has to be mentioned. Cunliffe also suggests that there is room to hold back on policy change (in so many words), given the tepid nature of growth and overall uncertainty.  Even so, given that he is a dove, his comments have given GBP a bit of a lift. Cable is still very much under the cosh however as the USD continues to reign supreme, while EUR/GBP is also reluctant to give up ground given the demand we have consistently seen ahead of 0.8800 this week.  

Looking to the day ahead, we still expect to hear comments out of Europe relating to the Brexit White Paper.  As we have already noted, chief negotiator Barnier usually comes out on a Friday to express his views on the talks as a whole has something material to cover this time around.  

It could be an interesting day ahead for the GBP pairs! 


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