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Slightly Dovish As Inflation Outlook Is Lowered

Published 10/09/2015, 02:29 AM
Updated 05/14/2017, 06:45 AM

The BoE kept its bank rate unchanged at 0.50% (another 8-1 split vote) as expected.

The minutes were slightly dovish as the MPC now anticipates that inflation will stay below 1% until spring 2016 due to the lower oil price and stronger GBP.

We still expect Bank of England to hike in Q1 16, probably in February, as inflation is expected to pick up in the beginning of next year.

We still look for a stronger GBP over the medium term supported by higher UK interest rates following a hike. We target EUR/GBP at 0.70 and GBP/USD at 1.57 in 6M.

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