BoE's Pill catches GBP/USD off-guard with summer cut view
May 14 (Reuters) -The latest remarks by Bank of England Chief Economist, Huw Pill, have largely been a reiteration of his views expressed recently.
The rate-setter has surprised by saying that it was not unreasonable to believe that over summer, the BoE would see enough confidence to consider rate cuts.
As a result of this dovish statement, which has caught markets off-guard, sterling has fallen to session lows. At the same time, the odds of a June rate cut have crept higher to 55% from 50% 0#BOEWATCH.
Pill did add that the BoE would need to keep a restrictive stance on policy to bear down on inflation persistence, though it is worth highlighting that officials have said that even if the bank rate was cut, policy would be restrictive.
All told, the BoE can be expected to lower rates in summer, the question of whether it is June or August will be answered by the upcoming data, in particular the April and May CPI reports.
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BoE pill reaction to GBP https://tmsnrt.rs/3WJTFwD
(Justin McQueen is a Reuters market analyst. The views expressed are his own.)
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