BoE projections imply absence of inflation panic - ANZ

Sterling fell in response to the BoE’s updated inflation forecasts which predict that CPI inflation will return to 2.2% in Q4 2019, according to Brian Martin, Head of Global Economics at ANZ.

Key Quotes

“Governor Carney said that the sole cause of the overshoot in inflation is sterling’s drop. There are no signs of inflation in wages or house prices.”

“The BoE expects that policy rates will rise by 50 bps over the next three years with the first rise unlikely before 2018 Q3.”