Minutes Minutiae
Market participants struggling to reconcile the BoE’s policy views with ‘booming’ data (according to several UK papers) will have the opportunity to better understand the thought-process behind forward guidance with the release of the August MPC minutes. Regardless of the content (and scale of opposition on the committee), our economists stress that forward guidance is a ‘given’, and ‘will not be revisited unless one of the knock-out clauses is triggered’. Nonetheless, there is still plenty for sterling to react to, but we suggest that the interest rates be allowed to take the lead: specifically, tenors susceptible to guidance error or adjustment.
Read the full report: UBS