Though markets tend to take the musings of Mark Carney, the head of the Bank of England, with a grain of salt, they seem to be putting a lot of weight behind one BoE member’s latest rhetoric. According to Martin Weale, an outgoing member of the BoE’s Monetary Policy Committee, a rate cut is not exactly a done deal. Several of Weale’s colleagues, however, do appear ready to vote for a cut in the wake of the June 23rd Brexit vote. Weale claims that the absence of panic mode among UK citizens and businesses should be an indication that markets don’t yet need reassurance; he says in contrast to the sentiment experienced at the beginning of the 2008 financial crisis, neither businesses nor consumers appear panic-struck.
As reported at 11:08 am (BST) in London, the GBP/USD was trading higher at $1.3232, a gain of 0.37%; the pair has ranged from a session trough of $1,319 to a peak of $1.328. The EUR/GBP was down 0.29% to 0.8343 Pence.
BoE at the Ready
Last week, the BoE decided to hold interest rates at the existing 0.5%, in spite of expectations of a rate cut. Mark Carney had said that if the UK economy needed more “help” the central bank would provide it, but at the latest policy meeting, only a single member favored slashing rates. That’s not to suggest that the situation could not soon change; most members of the MPC said they are ready to act, swiftly and forcefully, if necessary.