UK Inflation Cools

GBP

Britain’s inflation rate cooled in May and cost pressures in factories fell to a three-year low, the data may reassure the Bank of England there is no urgency to pursue its stated policy of gradually raising interest rates. The British central bank has kept the view that rate hikes will be required at some point to prevent the economy overheating. Britain’s Office for National Statistics said consumer prices rose at an annual rate of 2.0% in May after a 2.1% rise in April. Stable inflation, combined with the lowest unemployment rate in 44 years and rising wages, has taken the edge off the uncertainty about Brexit for many households whose spending drives Britain’s economy.

EUR

The ECB’s vice president said another large bond-buying program could be an option if inflation in the region doesn’t reach its intended target. Vice President Luis de Guindos added to Draghi’s comments and outlined some possible measures the central bank could implement. The ECB foresees “lingering softness” in the short term, in particular due to geopolitical factors and trade conflicts, which have weighed on exports and on the manufacturing sector.

USD

The dollar fell on Thursday after the U.S. Federal Reserve signaled it was ready to lower interest rates to combat growing domestic and global risks.

The Fed left interest rates unchanged on Wednesday as widely expected but said the case for lower rates was building, suggesting it could ease monetary policy as early as next month as it took stock of rising trade tensions and growing concerns about weak inflation.

Key Announcements

12.00 – GBP: MPC Official Bank Rate Votes
12.00 – GBP: MOnitary Policy Summary
12.00 – GBP: Official Bank Rate