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May 16 - 05:55 AM

GBP/USD - Spies 7-2 BoE MPC Hold Vote In June

By Robert Howard  —  May 16 - 03:48 AM

May 16 (Reuters) - At the end of a week of comments from Bank of England Monetary Policy Committee members, the balance of risk tilts towards a 7-2 MPC vote for an interest rate hold next month.

The two dissenters will almost certainly be ultra-dove Swati Dhingra and Alan Taylor, both of whom wanted the BoE to cut rates by 50 basis points on May 8.

Huw Pill and Catherine Mann look certain to vote for a rate hold on June 19, having wanted rates kept unchanged last week. On Tuesday, hawk Pill said BoE rates might need to stay higher than investors are thinking.

This would leave the decision in the hands of the five MPC members, including Clare Lombardelli and Megan Greene, who voted for a 25 bps cut on May 8. On Monday, Lombardelli said "caution remains appropriate" over UK inflation risks, while Greene said she was worried about rising UK inflation expectations.

The duo's guidance, and Thursday's better than expected UK gross domestic product data, suggests the centrists may all vote for a rate hold next month.

The expectation of a BoE rate hold in June is lending support to the pound, with GBP/EUR near to Tuesday's five-and-a-half week high of 1.19.

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(Robert Howard is a Reuters market analyst. The views expressed are his own)

Source:
London Stock Exchange Group | Thomson Reuters

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