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Policy debate heats up at BOE

The Bank of England (BOE) has so far shrugged of any concern over falling inflation and has maintained the policy action stable.

Noteworthy data & events-

  • Mark Carney expressed that the disinflation mainly due to oil and no intention to chase it.
  • 2 hawkish members have returned to neutral in recent past.
  • Over weekend, MPC member Martin Weale, a previous hawk expressed his desire for rate hike.
  • UK inflation showed further deceleration at -0.9% mom.
  • Business Leaders Survey showed better mood in industries.
  • Today's retail sales fell -0.3% mom, but still growing at 5.4% YoY basis. Noteworthy that sales excluding fuel fell -0.7%.
  • MPC member Ian McCafferty expressed his concern over economy and openness to policy easing.

Over these developments, further data & policy debate to remain mixed and the pound to continue the current range with bullish bias due to safer haven flows. Support is at 1.53 and 1.52 area whereas resistance around 1.547 and important 1.557.

 

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