Bank of England minutes and hurricane Rita dominated yesterday's news
All nine members of the Bank of England’s Monetary Policy Committee voted to keep rates at 4.5% this month, according to the minutes released yesterday that suggested policy makers are not poised for any imminent move. The section covering the interest rate debate was very short indicating the MPC, which was split 5-4 last month, had not even considered a move.
Sterling appreciated after the release pushing cable through the 1.8100 level. The minutes were relatively neutral and perhaps not as dovish as the market had anticipated. Concerns were raised over rising oil prices and the likely effect on inflation.
The committee did state though that consumer prices had been higher than expected for reasons other than increasing oil prices alone. ‘There remains a risk that oil prices could rise further. This poses an upside risk to the inflation projection,’ the minutes said adding that price expectations remain ‘well-anchored, though there is no room for complacency.’
Close attention will be paid to consumer spending data and UK growth over the coming weeks for further clues as to the next move by the committee.
Hurricane Rita has been upgraded to a category 5 storm. Fears of another devastating hurricane striking the US Gulf Coast pushed oil prices up to $68 a barrel and gold to new 18 year highs. The dollar suffered as a result, overshadowing signs from the Fed that further rate rises are coming.
Despite the Fed stating that the effects of Katrina would be ‘near-term,’ the likely effects of another hurricane are clear to see.
Today we see from the UK the release of the CBI industrial trends survey for September. Confidence in the industrial sector may well have deteriorated as a result of surging energy prices. In the US, weekly jobless claims and leading indicators are the focus for this afternoon.
Sterling appreciated after the release pushing cable through the 1.8100 level. The minutes were relatively neutral and perhaps not as dovish as the market had anticipated. Concerns were raised over rising oil prices and the likely effect on inflation.
The committee did state though that consumer prices had been higher than expected for reasons other than increasing oil prices alone. ‘There remains a risk that oil prices could rise further. This poses an upside risk to the inflation projection,’ the minutes said adding that price expectations remain ‘well-anchored, though there is no room for complacency.’
Close attention will be paid to consumer spending data and UK growth over the coming weeks for further clues as to the next move by the committee.
Hurricane Rita has been upgraded to a category 5 storm. Fears of another devastating hurricane striking the US Gulf Coast pushed oil prices up to $68 a barrel and gold to new 18 year highs. The dollar suffered as a result, overshadowing signs from the Fed that further rate rises are coming.
Despite the Fed stating that the effects of Katrina would be ‘near-term,’ the likely effects of another hurricane are clear to see.
Today we see from the UK the release of the CBI industrial trends survey for September. Confidence in the industrial sector may well have deteriorated as a result of surging energy prices. In the US, weekly jobless claims and leading indicators are the focus for this afternoon.
posted by Drs Search @ 8:51 AM
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