BOE policymaker Breeden says no need to rush in taking next policy step

BoE's Greene: Worth waiting before deciding on rate hikes

The desk believes the Bank of England (BoE) is likely to adopt a cautious approach regarding interest rate hikes, particularly in light of geopolitical tensions stemming from the US-Iran conflict. Per the full note [source], BoE's Greene has indicated that while inflation risks are skewed to the upside, the current sluggish economy and loose labor market may mitigate the second-round effects of energy shocks. The market currently prices in a 42% chance of a rate hike in June, which suggests that upcoming economic data will be pivotal in shaping expectations ahead of the meeting.

BOE chief economist Pill says choosing to hold on rates is not a passive choice

The desk interprets the recent remarks from BOE Chief Economist Huw Pill as a clear signal of the Bank of England's commitment to maintaining flexibility in its monetary policy. Per the full note [source], Pill emphasized that the decision to hold rates steady is a proactive choice rather than a passive one, indicating a readiness to respond to inflationary pressures, particularly from elevated energy prices. This aligns with our view that the BOE is navigating a complex inflation landscape, where second-round effects could push inflation higher than currently anticipated. With the consensus target for GBP/USD at 1.075, the market is poised for volatility as traders assess the implications of these comments on future rate decisions.

BOE Bailey: Financial market tightening gives us some time to assess raiseing rates or not

Fed's Barkin: Current policy is in a good place to respond to ongoing shocks