22 Jul 2013
Flash: BoE to maintain active role long-term – BMO Capital Markets
FXstreet.com (New York) - Stephen Gallo at BMO Capital Markets grapples the outlook of the BoE for the foreseeable future.
Key quotes
According to Gallo, “We remain of the view that the BoE will do everything in its power to maintain a moderate degree of froth within the interest-rate sensitive sectors of the economy for as long as it can without driving things too far in the run-up to the 2015 general elections.”
Carney’s July monetary policy statement was probably as much about defending the UK economy from the risks associated with Fed QE tapering as it was about obtaining these aforementioned goals.
Nevertheless, “we believe a chief difficulty facing policy setters is that after a point, the GBP may cease to appreciate even as near-term growth improves on the basis that uncomfortably high domestic price pressures will eat into growth, net exports and real incomes further out.” he adds.
Key quotes
According to Gallo, “We remain of the view that the BoE will do everything in its power to maintain a moderate degree of froth within the interest-rate sensitive sectors of the economy for as long as it can without driving things too far in the run-up to the 2015 general elections.”
Carney’s July monetary policy statement was probably as much about defending the UK economy from the risks associated with Fed QE tapering as it was about obtaining these aforementioned goals.
Nevertheless, “we believe a chief difficulty facing policy setters is that after a point, the GBP may cease to appreciate even as near-term growth improves on the basis that uncomfortably high domestic price pressures will eat into growth, net exports and real incomes further out.” he adds.