BoE sits tight, not ready for cut yet it seems/Claims and mfr'g data

The Bank of England kept rates unchanged as expected at 5.25% with 8 voting to keep it there and one wanting a cut. As keeping prices low and stable is the only BoE mandate, they acknowledged that inflation has fallen, “in part owing to base effects and external effects from energy and goods prices” and they mentioned a “looser labor market” but “key indicators of inflation persistence remain elevated.” They didn’t say it but likely meant on the service side. Keep in mind too that part of the deceleration in US inflation is base effects also.

Unlike Jay Powell, the BoE is not leaning toward a cut anytime soon it seems, though that can change, and they continue to outright sell gilts as part of QT. In their statement they said “The Committee has judged since last autumn that monetary policy needs to be restrictive for an extended period of time until the risk of inflation becoming embedded above the 2% target dissipates.”

The pound is lower as are gilt yields but pretty much where they were right before the announcement. Of the 8 that wanted to keep rates unchanged, 2 of them previously had wanted to raise rates again.