• Food inflation appears to have peaked
• We expect inflation to fall to around 5% in October
• Services inflation brings „unwelcome news“ since May though

He is still just reading from the statement mostly for now. We’ll get to the Q&A later for the more interesting bits and pieces.

This article was written by Justin Low at www.forexlive.com.

• Prior 40.71k

US layoffs fall to the lowest level in nearly a year and this marks the first year-on-year decrease in job cuts since May 2022. That said, there is still more than three times as many announced job cuts so far this year (481,906) compared to the first seven months of last year (159,021). That gives a little bit more perspective on things at the moment.

This article was written by Justin Low at www.forexlive.com.

Here’s a look at how the OIS curve has shifted before and after the BOE policy decision today:

It’s not much of a change in general as the BOE continues to allude to the fact that they are going to keep tightening policy further so long as the data suggests so. That is regardless of the fact that they have acknowledged that rates are now in restrictive territory.

So, yes there might be some backlash against the fact that traders have priced in roughly 32% odds of a 50 bps move today. However, it is not to say that the trajectory of where rates will end up is wrong or anything in that ballpark. There’s still a strong likelihood of two more rate hikes to come (which was what is priced in before) and that hasn’t changed.

For the pound, that means traders have some things to work out. On the one hand, there will be those „disappointed“ by a 25 bps move instead of a 50 bps move. But when you drill down to the overall pricing picture, it’s not to say that whatever that was priced in previously is being invalidated. Instead, I would argue that it is being reaffirmed instead.

Now, over to Bailey to see how he will follow through on this.

This article was written by Justin Low at www.forexlive.com.