The Bank of England Minutes of the MPC meeting for the 7th and 8th of May were released at 9:30am today. The MPC voted 9 – 0 to leave interest rates unchanged at 0.50% and asset purchases on hold at £375bn. The minutes were more hawkish than previous, with the first hint of a change in tone.
The key line in the release:
The Committee would continue to refine its views as the economy evolved, and for some members the monetary policy decision was becoming more balanced.
UK Retail Sales
At the same time as the BoE minutes the Office for National Statistics released the UK Retail Sales, statistics for April. Compared to March, there was significant improvement, +1.3%, though the timing of Easter is an attributing factor, the figure is a positive for the UK economy.
Sterling was bid prior to the releases, with the expectation of positive data. On release cable spiked to session highs, trading above 1.69 on the back of the impressive retail sales figures and the mentioning of the MPC decision becoming more balanced. Traders have been betting that the BoE will be forced to raise interest rates sooner than expected, as the economic growth begins to pick up pace and to cool a potential property bubble.
At time of release GBPUSD: 1.6898