On June 17 the Bank of England (BoE) will publish the minutes from its Monetary Policy Committee (MPC) meeting earlier this month. The vote is likely to remain at zero against versus nine in favor to hold the Old Lady’s benchmark interest rate at 0.5%. Two of the nine MPC members in the last go-around hinted the decision was finely balanced between holding and raising rates, but since last month, there hasn’t been enough evidence inspire a vote against holding rates. That being said, earlier today BoE policymaker Ian McCafferty said that some of the headwinds holding back the economy were starting to fade and could warrant a rate increase. This marks the first time a member of the MPC has discussed a rate hike since the fall of 2014 where pessimism toward the economy started to show from the central bank. The inflation data on June 16 will be more telling on how close the U.K. is to an actual rate hike as it must avoid the deflation which Governor Mark Carney has insisted is in a transitory state. Higher food and oil prices will validate Carney’s statement on the temporary nature of deflation, but in a global low-rate environment, it will be harder for the U.K. to surprise the market with an accelerated rate of growth to justify a rate hike anytime soon.
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