Pound in focus as Bank of England releases rate decision, minutes of policy meeting and inflation report at the same timeSuper Thursday: the Bank of England’s triple data day explainedSuper Thursday: Bank of England transparency or information overload? 8.43am BST We have done a Q&A that helps explain why Super Thursday is important: Super Thursday: the Bank of England’s triple data day explained 8.35am BST Both the US Federal Reserve and the Bank of England are on the cusp of raising interest rates for the first time in almost a decade, and the Fed is widely expected to go first, possibly in September.Another thing to look out for on Super Thursday are the Bank’s famous fan charts on the inflation and GDP growth outlook two years out. Inflation, which has dipped to zero, has been well below the Bank’s 2% target for some time. 8.12am BST As usual, the tone of Carney’s comments at the press conference will be just as important as the voting outcome of the policy meeting. Analysts at Capital Economics say the Bank’s governor may steal the hawks’ limelight on Super Thursday:Although another no-change decision is likely, we expect the minutes to reveal that at least two of the nine Committee members have begun to vote to raise rates. The minutes of July’s meeting showed that a number of members thought that the risk that CPI inflation would overshoot its 2% target in the medium term was growing and suggested that only the Greek crisis was holding them back from switching their votes. Last week’s news that GDP growth sped up from 0.4% in Q1 to 0.7% in Q2 is likely to have reinforced these members’ concerns about the medium-term inflation outlook.We would, however, caution against placing much weight on the minutes until the governor has commented at the subsequent Inflation Report press conference at 12.45 BST. While he is just one member among nine, governors have rarely been outvoted in the past and internal members of the MPC often take their steer from him. And we think that he is likely to sound quite dovish again. 8.03am BST Angus Campbell, senior analyst at UK online broker FxPro, thinks the ‘data dump’ could lead to more volatility for the pound.Today is likely to mark the first steps towards the commencement of the interest rate tightening cycle for the Bank of England. The markets can rest assured there won’t be any rate hike at this meeting and in the past we would not know how the MPC had voted for another two weeks, but going forward those minutes and voting patterns will be released along with the decision. Whilst the premise of this change to the BOE’s procedures may have good intentions, it could lead to greater short term volatility both over the release and after it, before investors have enough time to absorb all the information and get a better understanding of what the BOE’s thinking is. Throw into the mix the Inflation Report and sterling could see considerable volatility. This morning sterling is a little higher against the dollar at $1.5635.Investors continue to expect the U.S. Federal Reserve to raise rates before the Bank of England. (via BBG) pic.twitter.com/qxaiD8DxUJ 7.54am BST Super Thursday: Bank of England transparency or information overload? asks the Guardian’s economics editor Larry Elliott.Instead of the previous drip-feed of information, there is now going to be a data dump... This looks suspiciously like a super-charged version of forward guidance, the big initiative of Mark Carney when he became the Bank’s governor two years ago. Forward guidance proved to be a bit of a dud, not because of the way it was communicated but because of the Bank’s inability to forecast the economy accurately.” 7.46am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Super Thursday has arrived – the day when we get three big releases from the Bank of England that will shed light on its thinking on the state of the economy. For the first time in its 321-year history, the central bank will announce its monthly decision on interest rates, publish the minutes of its policy meeting where the decision was made, and present the quarterly inflation report at the same time.Will governor Carney be as adept at managing market expectations about the potential glide path of rates, as ECB President Mario Draghi has proved to be in his tenure as head of the ECB, or will he live up to his moniker as the “unreliable boyfriend?” Continue reading...
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