BoE keeps rates unchanged at 0.75%, vote unanimous
Going into the BoE announcement, there were some fears that after the hawkish talk by some MPC members, the vote would include a dissenter - or 2 - in favour of a hike. Instead, the committee voted unanimously to keep rates on hold at 0.75%.
The statement did say however that ongoing tightening of policy is needed at a gradual pace, but that this is predicated on a smooth Brexit. The MPC sees inflation falling below 2% later this year, and has also downgraded its Q2 GDP projection from 0.2% to flat, while they also see signs that wage growth is leveling off.
Cable was bid up into the announcement to hit highs just shy of 1.2730 and has since dipped back below the 1.2700 level. From here, the battle is on to see whether traders continue to go off the back of USD selling, which could then still see 1.2750 challenged again.
EUR/GBP has pushed above 0.8900 again, though with the ECB also turning dovish, it is hard to justify the cross rate much higher again, though we have run into strong support at 0.8870 so the coming hours will dictate which way we go from here with 0.8925 interim daily resistance to look out for.