020 7898 0500Sterling lifted following comments from BoE member McCafferty, who is one of the three voters who opted for a hike at the last meeting. As well as his recommendation to unwind QE measures earlier than planned, he stated that BoE should also review its policy of leaving QE in place until interest rates are at 2%. He added that he is still in favour of a 25 basis-point hike despite the downturn in data.
Meanwhile, the repeal bill was published. This is a huge undertaking and will ensure the same rules apply in the UK after Brexit whilst giving the UK Parliament power to change them. MPs will begin a series of debates on Friday and need to be in agreement by the time the UK leaves the union.
The big data of the week was the average earning figures. This number fell to a level of 1.8% from 2.1%. The question as to whether the differential between the inflation and wage growth has increased will be answered next week. If inflation continues to increase and average earnings continue to slide, the BoE’s next interest rate decision won’t be an easy one to make at all.
It’s a quiet day in terms of economic data today, so much of the focus will be on political matters.
