As expected, the Bank of England kept policy unchanged at the February Inflation
Report meeting, leaving Bank Rate at 0.50% – a decision supported by all of the members of the Monetary Policy
Committee ( MPC
). The economic projections were also broadly in line with our view, with GDP growth nudged up modestly over the forecast horizon, while expectations for inflation
at the end of the 2yr and 3yr forecast horizon were little changed and continue to signal an overshoot of the inflation
target, similar to the view implicit in the economic projections contained in the November Inflation
Report. However, the Bank of England delivered a more-hawkish conclusion by suggesting that “monetary policy would need to be tightened somewhat earlier and by a somewhat greater degree over the forecast period”.
Strengthening in the Yen as a safe haven has driven pair lower.
Technical structure support bearish