Incumbent BoE Rate Setter Offers Downbeat Assessment  

GBP

The Pound struggled during yesterday’s session after new Bank of England rate-setter Jonathan Haskel offered a more downbeat assessment of Britain’s readiness for higher interest rates. Haskel, an economics professor at London’s Imperial College, pointed to persistently weak wage growth in comments that weighed on sterling.

Productivity expert Haskel cited theories that a high number of workers with too few or precarious hours helped explain why wage growth,has failed to take off as the BoE expected. While Haskel agreed with the BoE’s sentiment that rates will probably need to rise, investors judged his tone to be more dovish than the Monetary Policy Committee’s (MPC) Ian McCafferty, whom Haskel replaces in September.

Last week the BoE bolstered expectations that it will raise rates in August for only the second time in a decade, after its chief economist unexpectedly joined the minority of policymakers voting for a hike. Haskel’s comments appeared to place less urgency on the need for higher rates, sending sterling falling.

Brexit was again in the headlines yesterday after the government’s flagship legislation has officially become law, Speaker John Bercow has announced. Bercow told MPs the EU Withdrawal Bill had received royal assent – meaning the Queen has agreed to make it into an Act of Parliament. This enables EU law to be transferred into UK law in an attempt to ensure a smooth Brexit.

Key Announcements

09:30 – GBP: BOE Governor Carney due to hold a press conference on financial stability in London
13:30 – USD: Core Durable Goods Orders expected to decrease to 0.5%
15:30 – USD: Crude Oil Inventories