Forex Flash: UK hightlight – BoE inflation report – TD Securities

FXstreet.com (London) - Marclin Budkiewcz, Rates and FX Strategist at TD Securities said that the highlight for the UK this morning was the Bank of England’s Inflation Report, which was Governor King’s last. He noted that while the market didn’t see the massive changes to growth or inflation forecasts that we’ve seen in the last two IRs, they did see enough of a shift lower in the CPI forecasts to change the BoE’s message. He went onto to say that the Feb IR focused on the fact that inflation would remain above target for more than 2 years, and the MPC had to spend a lot of effort in getting markets to understand and accept the message, which eventually formed part of the renewal of the BoE’s remit in the government’s March Budget. Also importantly noted was where the BoE has now gone back to forecasting inflation returning to target within the next two years, and even has CPI slightly below 2% in H2 2015-H1 2016, which may confuse the message