• I see risks to inflation on both sides.
• We have seen a fall in services inflation and wage settlements.
• Minimum wage comes up as pressure for businesses more than any other pressure.
• I am more concerned about upside risks to inflation as costs are higher if inflation gets entrenched.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Forward-looking price and wage indicators have been flat and above target for four months, raising the risk of inflation persistence.
• Financial markets‘ inflation expectations suggest the BoE will not get to a sustainable 2% inflation in the forecast horizon.
• Risks to inflation are almost all upside.
• I do not use gradual language on rate cuts.
• I prefer activist strategy on monetary policy.
• It’s important to keep rates on hold, and not pursue a gradualist strategy on rate cuts.
• The current stance on monetary policy is not particularly restrictive.
• Gradualism causes inflation persistence to drag on for longer.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• It’s ok to continue with a gradual pace of rate cuts.
• Gradual cuts implies 100 bps of easing over the next year.
• This is closely aligned with market curve currently.
• That is not necessarily what will unfold, depending on economic conditions.
• There are conditions where the BoE can go faster.
• Labour market data is key for my view on rate cuts.
• Disinflation is unfolding as we would expect.
• QE is a tool that needs to be there for a crisis.
• QT is moving the BoE in a healthy direction compared to the past.

This article was written by Giuseppe Dellamotta at www.forexlive.com.