020 7898 0500It was a good day for sterling as expectations of an interest rate rise in August increased. While the BoE voted to keep rates on hold this time around, a 7-2 split was expected. It was a surprise then, to learn that Haldane had turned hawkish and voted to increase rates, along with McCafferty and Saunders. The markets received the news positively and sterling retraced the losses it had made in the run-up to announcement to come back from a seven-month low against the dollar.
The public sector net borrowing figures were also positive, as a trade deficit of £5 billion had been expected in May, but the figure actually came in at £3.356 billion. Excluding state-owned banks, the borrowing decreased by £2 billion to post the lowest May net borrowing since 2005.
There are no major economic data releases on the calendar for the UK today, but we are set for a fascinating run-up to the next interest rate decision. The question really is whether the UK economy can impress from now to then, which might encourage other policymakers to follow Haldane.
