The British pound appreciated against the US dollar as the BOE policymakers participated at the monetary policy hearing in parliament.
BOE chief economist, Huw Pill uphold hawkish tone:
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There is substantial further monetary policy tightening still to come
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There is no room for complacency
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Anticipates an extended period of weakness in UK economic activity
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We have to be prepared to see through policy tightening
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Need to address potential upside risks to inflation
Haskel spoke in a similar manner and said the economic theory shows inflation uncertainty should be met with more forceful action.
On the other hand, Governor Bailey pointed to a tight labour market and expects inflation to ease rapidly this year. Tenreyro believes that rates are too high right now, however acknowledges that a big recession is much needed to keep inflation at 2%.
Today's statements do not bring anything new information, markets still expect further small rate hikes, with a 25 bp increase at the next meeting as the UK economy is slowing down.
GBPUSD bounced off the local support at 1.2075, which is marked with previous price reactions. Nevertheless as long as the pair sits below crucial resistance at 1.2215, which coincides with 100 EMA (purple line) and 200 SMA (red line), main sentiment remains bearish. Source: xStation5
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