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27 Sep 2013
Flash: Carney lead GBP strength seems exaggerated - BMO Capital Markets
FXstreet.com (Barcelona) - Stephen Gallo, European Head of Currency Strategy at BMO Capital Markets feels that the strength in the GBP following Carney’s QE remarks and UK house price data for September seemed exaggerated.
Key Quotes
“Since the July MPC meeting, not a single Committee member has voted for an additional round of QE. Moreover, when you strip out inflation and the impact of London prices, UK house prices aren’t really doing that much.”
“They’re barely even rising faster than nominal incomes. The BoE is probably a good distance away from having to deal with problems here, but even if it weren’t, would interest rates be the tool it would use to deal with them? We’re not at all convinced the answer to this question is ‘yes’.”
Key Quotes
“Since the July MPC meeting, not a single Committee member has voted for an additional round of QE. Moreover, when you strip out inflation and the impact of London prices, UK house prices aren’t really doing that much.”
“They’re barely even rising faster than nominal incomes. The BoE is probably a good distance away from having to deal with problems here, but even if it weren’t, would interest rates be the tool it would use to deal with them? We’re not at all convinced the answer to this question is ‘yes’.”