BoE's chalk and cheese guidance puts GBP in quandary
Oct 4 (Reuters) - Relatively hawkish interest rate guidance from Bank of England Chief Economist Huw Pill has stirred the sterling pot, 24 hours after a dovish steer from Governor Andrew Bailey gave GBP longs indigestion.
Pill said on Friday the BoE should only move gradually in cutting interest rates - a view which contrasts with Bailey's suggestion that the BoE could become "a bit more aggressive" in its approach to lowering rates.
The view from Pill suggests he is unlikely to vote for another 25 basis point BoE rate reduction in December, further to the quarter-point cut to 4.75% expected next month.
GBP/USD and GBP/EUR rose to respective intra-day highs of 1.3167 and 1.1940 courtesy of Pill, a day after tumbling to three-week and two-week lows of 1.3093 and 1.1857 on Bailey.
Monetary policy friction between Pill and Bailey stretches back to November last year, and was most visible when the pair lined up on opposite sides of August's rate cut vote (Bailey voted in favour, Pill against).
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
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