Trade Desk Thoughts - U.K. MPC Meeting Minutes

U.K. MPC Meeting Minutes Actual 0-1-8, Expected 1-1-7, Previous 1-1-7

Release Explanation: It's a detailed record of the BOE MPC's most recent meeting, providing in-depth insights into the economic conditions that influenced their vote on where to set interest rates

Trade Desk Thoughts: The BoE's minutes from the latest meeting held September 3-4 shows the bank is starting to have a less inflationary outlook, as inflation is expected to fall later this year. The voting was split to 1-8, with Mr. Blanchflower voting for an immediate reduction in the overnight rate of 50 basis points. However, the bank's assessment was that the current monetary stance is appropriate and decided to leave the interest rate unchanged at 5%. The bank also discussed the sharp drop of the pound against the other major currencies, citing the markets has already priced in a 75 basis point reduction in the overnight rate by the by the middle of next year. This was the first time in the last three meetings that Mr. Besley did not vote for a rate increase.

Forex Technical Reaction: The pound dropped 40 pips immediately after the release. Earlier, the pair had advanced 160 pips, but was rejected at the 20-day moving average, reversed, and gave back the gains made since the start of the Asian session.

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