GBP falls on dovish remarks from Saunders
- Rates could go either way after Brexit
- Brexit uncertainties are a slow puncture for the UK economy
- Deferring monetary policy changes until after Brexit could lead to inappropriate policy
- BoE’s next move could ‘quite plausibly’ be a cut even if no-deal Brexit is avoided
This is dovish stuff from Saunders as he makes the case for rate cute even before a Brexit outcome. For so long the BoE has been seen as irrelevant in so much that it was waiting on the sidelines for Brexit to happen. This is new and suggesting that the BoE should step up to the plate to aid the UK economy. BoE getting ready to enter the ring. Ding, Ding, Round 1 and the GBP falls
BoE to get off the sidelines. GBPUSD is down 40-50 pips reflecting that shift. Expect GBP selling.