The BoE sits tight/Claims data/Philly mfr'g outlook gets muddy

Before I hit on the data we’ll start with the Bank of England decision to leave its bank rate unchanged at 4.5% with an 8-1 vote to do so. That one member wanted to cut again by 25 bps while some in the prior meeting that wanted to cut, including Catherine Mann that wanted a 50 bps reduction, chose to sit tight.

Not surprisingly the reason for them doing nothing, “Since the MPC’s previous meeting, global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded. Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally. The German government has announced plans for significant reform to its fiscal rules.”

And their bottom line on where things go from here, “Based on the Committee’s evolving view of the medium term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate.”

As none of this is much of a surprise, gilt yields, the pound and the FTSE 100 are about where they were just before the news.

Initial jobless claims totaled 223k, up 3k w/o/w and about in line with the estimate of 224k. The 4 week average is now 227k vs 226k in the week before. Continuing claims jumped by 33k to 1.892mm after falling by 38k in the week before and still hovering around the highest level since November 2021.