Sterling wobbled yesterday as The Bank of England’s Monetary Policy Committee decided to keep rates on hold at 0.5%.
The decision to stay put was no surprise however the accompanying Inflation Report, statement and press conference by Mark Carney highlighted how the economy had hit a soft patch of late adding drag to growth.
A lot of this drag was put down to the bad weather seen in Q1 however recent poor data indicates this has rolled over to Q2 and can’t all be attributed to the Beast from the East. Markets still expect a 2018 rate rise however an August move now looks to be off the table leaving around an 80% chance of a hike in November.
The only data of note yesterday from the UK was Manufacturing Production m/m which dipped -0.1% slightly better than had been expected. US Dollar English Pound exchange rate continues to hover around the 1.35 handle.