• BOE will decide appropriate degree of restrictiveness at each meeting
• Not giving any view on the path of rates to come (when asked about a „one and done“)
• We will go from meeting to meeting, making judgement based on evidence
• Does not want to comment on market curve on rate cuts

It doesn’t look like he will want to pre-commit to anything nor does he rule out the notion that they may pause after cutting rates today. As things stand, traders are pricing in a ~55% probability of another rate cut in September. Pretty much another judgement call it would seem. The BOE will meet next on 19 September and there will be two CPI reports to watch before then (14 August and 18 September).

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

• Services price inflation and domestic inflation pressures remain elevated
• There might be a slight rise in services price inflation in August, before easing for the rest of the year
• Watching services prices very carefully
• Should not adjust our course with every data surprise that comes in
• There is still a question on whether persistent component of inflation can return to 2% sustainably
• Need to make sure policy is sufficiently restrictive to return inflation to 2% target
• Appropriate to adjust policy restrictiveness a little at today’s meeting

This is mainly a rehash of the statement. So, there isn’t really anything new as he continues to highlight that there are still risks to the inflation outlook. On to the Q&A now. GBP/USD is still down 0.5% on the day at 1.2785 but settling a little higher after the decision earlier.

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

That is to be expected as the bloc is set to continue with the current policy stance before unwinding some of the production cuts later in October. Carry on as you will.

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

US-based employers announced 25,885 job cuts in July, which is roughly a little over 9% higher compared to the same month a year ago.

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

• Prior 5.25%
• Bank rate vote 4-0-5 vs 4-0-5 expected (Pill, Mann, Haskel, Greene dissented to keep rates on hold)
• Decision was „finely balanced“
• Domestic inflationary persistence is expected to fade away over the next few years
• There is a risk that inflationary pressures from second-round effects will be more enduring in the medium-term
• Need to be careful not to cut rates too quickly or by too much
• Will ensure bank rate stays restrictive for sufficiently long to return inflation to 2% target sustainably
• Will decide on degree of policy restrictiveness at each meeting
• There is uncertainty about interaction between cutting bank rate and quantitative tightening
• Full statement

The rate cut itself can be argued to be the more dovish decision, but the details are less than convincing. The five policymakers who voted for a rate cut were Bailey, Breeden, Dhingra, Lombardelli, and Ramsden. But the footnote reads that they just found it „appropriate to reduce slightly the degree of policy restrictiveness“. I think there might be an emphasis on the word „slightly“ there.

Additionally, the BOE notes that some of the five members are of the view that „inflationary persistence had not yet conclusively dissipated, and there remained some upside risks to the outlook“.

Put together, that might allude to a pause in September unless inflation developments continue to improve in the weeks ahead.

As for the dissenters, the footnote mentions that they „preferred to maintain the current level of bank rate until there was stronger evidence that upside pressures to inflation would not materialise“. But just be mindful that this will be Haskel’s last meeting in attendance before stepping down from his post as BOE policymaker.

GBP/USD dipped initially on the decision to a low of 1.2751 but is holding around 1.2760 levels now, just down slightly from the decision. That said, the pound had made some slight moves in positioning for a dovish outcome earlier here.

Now, let’s see if Bailey will explicitly mention a one-and-done scenario or if he is going to keep September on the table later.

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