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Jan 25 - 06:55 AM

GBP/USD - COMMENT-Radio Silence From BoE As Sterling Event Risk Looms

By Rob Howard  —  Jan 25 - 05:20 AM

Jan 25 (Reuters) - The sound of silence from most Bank of England Monetary Policy Committee members has been noticeable ahead of the first UK monetary policy announcement of 2024 next week, raising the risk of a volatile start to February for sterling.

MPC members who have said nothing since Jan.
1 include the four 'external' members - three of whom wanted the BoE to raise rates in December.
The fourth 'external', Swati Dhingra, is the most dovish member of the MPC.

The pound could weaken if the BoE springs a dovish surprise on Feb.
1, or strengthen if the BoE's guidance is more hawkish than expected.

Arguments for both can be made, with last week's slower UK wage growth data and bleak December retail sales on the one hand, versus hotter than expected UK December inflation data and January PMI beats on the other.

HSBC says it is likely that no MPC members vote for a rate hike on Feb.
1 for the first time since September 2021, and that one might back a cut.

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Source:
Refinitiv IFR Research/Market Commentary

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