Excerpt from: Spot Forex
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| August 07, 2008 | | Quick comment from GFT | No change was by far the market consensus, despite the minutes from the previous meeting showing a three-way split. The reality is that despite a clearly slowing economy, the twin evil of rising inflation simply rules out any possibility of a majority decision in favour of a cut or a hike in rates for now. The quandary has led the Bank to sit tight and keep rates on hold for a fourth consecutive month. The recent hikes in utility bills will filter through to inflation over the next few months. GFT’s unique UK CPI futures show inflation is expected to peak around 4.7 per cent in September this year. A leap in the consumer price index on this scale could even tip the Committee’s vote towards a rate hike; despite all the data pointing towards an impending recession, the Bank’s mandate is after all to manage inflation, and just as importantly, contain inflation expectations. | Topic Tags: CFDs, GFT Global Markets, Spot Forex, Spread Bets | |
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