BOE’s Breeden: Not at all obvious there is a path to lower energy prices.
GBP/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Bank of America | Bullish | 1.3700 |
Scotiabank | Bullish | 1.3600 |
UOB | Bullish | 1.3700 |
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Comments from Bank of England Deputy Governor Breeden on energy prices and inflation cross the wires: Not at all obvious that there is a path to lower energy prices. Indirect pass through of energy price rises limited so far, suggests slack in economy. The larger and longer the e
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Bank of England some way off a rate hike despite energy price spike
The desk interprets the Bank of England's position to keep rates on hold, despite rising energy prices, as a signal of a cautious approach to monetary policy. Per the full note from ING, the BoE is unlikely to hike rates at the upcoming meeting on July 30, with expectations of inflation peaking at around 3% later this year, which remains well below their 4% trigger level for significant second-round effects. Although recent energy market surges pose a challenge, they are not considered sufficient to warrant an immediate rate adjustment, likely preserving the current rate environment and keeping traders on alert. With no high-impact events slated on the economic calendar in the next few weeks, the potential for a change in sentiment seems limited at this time.
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