FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The BoE kept its policy stance unchanged, and the balance of voting remained at 8 against 1 in favour of the status quo. The minutes of the meeting were fairly balanced, if not somewhat more dovish than anticipated, with MPC members differing in view on whether global developments "signalled that the most likely path for global activity was weaker than assumed previously" or whether it simply downside prevailing risks.
While recent comments and remarks prior to today's release pointed to the MPC providing a more hawkish stance, today's minutes read somewhat on the dovish side. The committee acknowledged that revisions to data releases had left consumer spending, household income, savings, and business investment weaker than previously thought. They appeared comforted, however, by survey data suggesting strong consumer confidence and the fact that "a range of business investment survey indicators continued to suggest solid investment intentions".
Barclays notes, the committee's focus on some topics more closely, including:
- Whether "falls in risk-free interest rates reflected a monetary stimulus that would act to bolster growth in advanced economies, or whether the declines would merely act to offset the impact of a weaker global environment".
- The extent to which recent global developments signalled that global growth was weaker than previously assumed versus simply accentuating downside risks already prevalent.
- The pace of exchange-rate pass through.
- The impact of the downward revisions in business investment and the revisions to the composition of consumer spending.
The minutes were particularly interesting in two ways. The first is the lack of discussion regarding market expectations for a rate hike, which have been pushed out to H1 17 from March 2016 just two months ago.
While one could have expected a desire from the MPC to re-anchor market expectations, the lack of mention may arise from not wanting to over-engineer such a statement, leading to an overly hawkish market reaction.
The second way was that the minutes say "some members of the Committee noted recent evidence that lags in the response of inflation to interest rate changes appeared a bit shorter than previously thought". The implication of this is that the committee could delay hiking and still achieve its overarching strategy without inflation overshooting.
