The key talking point from yesterday was the BoE’s interest rate decision. As expected, the MPC voted to keep rates on hold, although it might have surprised some quarters that the vote was unanimous – especially given the tone struck in the press conference after the decision announcement.
Governor Carney said several things of, ahem, interest, not least that he expected inflation could rise above 3% again in the short-term. He also said that the central bank was increasingly confident that wage growth would pick up soon. If true, that’s good news for UK households – but only if the gap between wage growth and the consumer price index narrows.
In the minutes of yesterday’s meeting, we also learned that the BoE warned that rates could rise higher than was forecast three months ago. Strange, that even as they were announcing that rates would be kept on hold, they were also warning that the cost of borrowing could increase.
Today we have the industrial and manufacturing production figures, as well as the balance of trade for December. A busy end to a bit of a strange week for the pound which has seen much volatility to say the least.