19 Jan 2016
BoE stuck in low for longer mood - Scotiabank
FXStreet (Guatemala) - Analysts at Scotiabank explained that higher than expected UK CPI data for December helped lift the GBP earlier in the session; headline CPI rose 0.2% y/y in the month, in line with forecasts, but core prices rose 1.4% y/y, well ahead expectations of a 1.2% gain.
Key Quotes:
"Some seasonal one-offs helped boost prices and these factors may unwind to an extent in January while Gov. Carney’s comment that “now is not the time to raise rates” will bolster expectations that the BoE is stuck in low-for-longer mode, however.
Still, our UK analyst notes that the upside surprise in inflation suggests some pricing power is returning to the UK economy and that is encouraging."
Key Quotes:
"Some seasonal one-offs helped boost prices and these factors may unwind to an extent in January while Gov. Carney’s comment that “now is not the time to raise rates” will bolster expectations that the BoE is stuck in low-for-longer mode, however.
Still, our UK analyst notes that the upside surprise in inflation suggests some pricing power is returning to the UK economy and that is encouraging."