Much of the statement is lengthy and verbose as the central bank basically endorsed the government’s recent actions and ruled out any emergency rate hikes to be done in between its policy meetings. The statement on the latter reads:
“As the MPC has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government’s announcements, and the fall in sterling, and act accordingly.”
That will only come on 3 November, so there is quite some ways to go.
Anyway, going back to the statement, it is rather underwhelming considering the fact that markets have been whacking the pound and gilts over the past few sessions. The beating has stopped a little today and as we look towards month-end but one would figure that we might actually see a return of the selling at any point now.
The technical predicament for GBP/USD is quite an awful one to say the least as we continue to keep at levels last traded since 1985. The pair is up 0.9% on the day to 1.0785 currently but on the balance of things, the path of least resistance remains for a continued push lower – barring any technical correction only that is.
To think that Rishi Sunak saw all of this coming makes the whole situation quite a damning one for the incumbent government (h/t @ johnauthers):
The title of his article in The Spectator on 31 August? “Who is Sunak kidding with his warnings about sterling?”. Wow indeed.