- The Bank of England
It seems that markets were overexcited about Mark Carney's message earlier this month when he claimed markets, consumers and businesses should prepare for a sooner-than-expected rate hike. On the back of these comments the cable soared above 1.70-mark, however, inflation report published by the BoE on June 24 eased some of the pressure amid investors, with the GBP/USD pair falling to 1.6965.
According to the Bank of England, the U.K. economy will accelerate in the second half of the year, however, subdued wage growth is pointing at remained spare capacity within the economy that should be used before considering a rate hike. While some investors were already pricing in a potential rate increase later this year, a lengthy testimony to a group of lawmakers showed adjustments of the monetary policy will be "data driven", meaning the Governor repeated the same pledge, the central bank expressed in March 2009. The statement came as disappointment for markets, and some have called the BoE as an "unreliable boyfriend", giving mixed signals on further moves of the monetary policy. The U.K. Labour MP, Pat McFadden stressed out there has been a lot of positive signals over the past year, and they all were confusing for consumers and companies. He also said that rates, perhaps, will not be revised until 2016.
© Dukascopy Bank SA