ING’s Chris Turner notes that February UK CPI was broadly in line, but stronger services inflation and higher energy prices keep Bank of England (BoE) hawks vigilant. Megan Greene’s comments today could align with Huw Pill’s stance and position her for an April rate hike vote, with a 25bp move now 72% priced.
BoE rhetoric underpins Pound rate expectations
“February UK CPI data released this morning was largely in line with consensus except for the services component which came in slightly higher at 4.3% YoY. Obviously, the February data is old news and the key focus now is on how the conflict and higher energy prices ripple through the UK economy.”
“We will hear from one of the Bank of England’s hawks today, Megan Greene. At last week’s BoE meeting, she was concerned about the rise in energy and fertiliser prices impacting food – a key driver of consumer inflation expectations. She has been sounding like she is in the BoE Huw Pill’s camp on inflation and yesterday he said that the ‘fog of uncertainty’ should not be an excuse for inaction.”
“Comments today from Megan Greene could potentially position her for voting for an April rate hike as well. An April 25bp BoE hike is now 72% priced. We doubt that will be delivered, but we would not fight this trend today.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/boe-hawks-keep-hike-risk-alive-ing-202603250916
