BOE Vote Split is Key for Sterling

Dow Jones
Jul 29

0741 GMT - The Bank of England is widely expected to leave interest rates unchanged Thursday but the vote spilt will determine sterling's reaction, Ebury's Matthew Ryan says in a note. A 7-2 split with two policymakers favoring a rate rise, alongside remarks that play down inflationary risks from the energy spike could see U.K. rate hike expectations fall and weigh on sterling, he says. "Conversely, a 6-3 vote combined with forecasts showing inflation peaking closer to 4% than 3% would likely be bullish for sterling, while lifting yields at the short end of the curve," Ryan says. Sterling rises 0.1% to $1.3295. The euro trades flat at 0.8567 pounds after reaching a near four-week high of 0.8573 in Asian trade, LSEG data show.

 

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