Comments from Bank of England rate-setter Megan Greene:
Most of the near-term hump in inflation is due to one-off factorsWe expect inflation to continue to come down to target over medium termOur view is that we can look through it but of course that’s a big riskThere is a risk people won’t consume even as rates come downTrade fragmentation should be disinflationary for the UKGoing forward we could see policy divergence
I’d love to know more on why she thinks global fragmentation on trade — or deglobalization — will be disinflationary for the UK when intuitively it’s the opposite. In any case, she’s certainly dovish here. The market is pricing in 38 bps in BOE easing this year.
This article was written by Adam Button at www.forexlive.com.
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