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Bank of England (BoE) policymaker Catherine Mann said on Tuesday, “wage increases of 4.0% would be a challenge to returning CPI to 2.0%.”
UK output data and business surveys have remained positive since May’s boe forecasts.
Upside inflation surprises since May have been in core goods and food prices.
Services price inflation is also a concern for achieving 2% CPI target.
UK inflation expectations remain too high.
There’s still a question in my mind how tight UK financial conditions really are.
Drop in inflation expectations was important for me to switch my vote to 25 bp rate hike from 50 bps.
Monetary policy is not good at fine-tuning, should focus on inflation.
Inflation expectations are now on the downswing.
The above comments fail to move a needle around the GBP/USD pair. The spot is trading at 1.2562, adding 0.44% so far.
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