This week, it is all about the Inflation Report released tomorrow. With no statement released after the Bank of England decided not to change monetary policy, the market has been in hot anticipation of this formal forward guidance that Mark Carney will issue for England. The discussion of forward guidance has become fragmented: hard guidance vs. soft guidance; inflation target vs. GDP target. Given the state of the UK economy, it will be interesting to hear what Carney has to say in his 1st inflation report. Even more interesting will the be the market reaction. Yesterday’s strong retail sales caused sterling to rally hard across the board. Today, however, sterling has weakened after strong manufacturing numbers were released. Either the market is running out of steam or it is already looking ahead to tomorrow’s inflation report.
- Bank of England’s Mark Carney to unveil new interest rates guidance (The Guardian)
- Mark Carney set for interest rate promise to lift economy (The Telegraph)
- Bank of England risks blow to credibility (FT)
- U.K. economy picks up pace (CNN Money)
- UK recovery picks up speed as manufacturing roars back to life (The Telegraph)
- Pound rallies as Carney holds back a statement (Forex Live)
- Wall Street pros believe a Fall taper is already priced into markets (CNBC)