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16 Apr 2013
Forex Flash: UK and EU CPI in focus this morning - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ believes that the release of teh latest CPI reports for the UK and EU will be in focus today.
He sees that the UK inflation report for March is expected to reveal that the annual headline rate remains largely unchanged as gas and electricity price rises have now passed and would leave the average rate of inflation during Q1 a little above the BoE’s projection which is likely holding back the MPC from introducing further QE in the near-term. However, he writes, “Their near term reluctance to ease policy further is only likely to provide temporary support. The BoE’s new remit explicitly gives the MPC greater flexibility to run looser monetary policy to support growth while tolerating an inflation overshoot for longer. If the economic recovery continues to prove disappointing then more QE is likely from the BoE later in 2013 weighing upon the pound. BoE Governor King is also scheduled to speak later today upon “Rethinking macro policy”. “
He sees that the UK inflation report for March is expected to reveal that the annual headline rate remains largely unchanged as gas and electricity price rises have now passed and would leave the average rate of inflation during Q1 a little above the BoE’s projection which is likely holding back the MPC from introducing further QE in the near-term. However, he writes, “Their near term reluctance to ease policy further is only likely to provide temporary support. The BoE’s new remit explicitly gives the MPC greater flexibility to run looser monetary policy to support growth while tolerating an inflation overshoot for longer. If the economic recovery continues to prove disappointing then more QE is likely from the BoE later in 2013 weighing upon the pound. BoE Governor King is also scheduled to speak later today upon “Rethinking macro policy”. “