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Cable plummeted on BoE

As expected, the Bank of England left its monetary policy unchanged with a bank rate at 0.50% and an asset purchase facility of 375B on the first meeting under the new governor Marc Carney. Recent UK data from the services and manufacturing industries had surprised some economists by showing faster rates of growth.

According to the MPC policy statement, implied path of future bank rate is not warranted by recent domestic developments. It was said that the analysis of case for forward guidance will influence the August policy discussion. The former governor of Canada’s central bank said beforehand he is a supporter of U.S. Federal Reserve-like guidance for how long interest rates may remain unchanged to provide borrowers with higher certainty.

GBP/USD plummeted by more than 150 pips on the news, falling from $1.5460 and touching  fresh monthly lows below $1.5100.

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