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Bank of England communication supports GBP while limiting upside

MUFG’s sentiment framework flags a still-divided Monetary Policy Committee, with hawkish conviction in several members offset by a more balanced tone from Governor Bailey.

Reported · Written up by our desk · Major Pairs

MUFG analysts, using a textual sentiment framework on the latest Bank of England decision, see a “hawkish hold” in the Monetary Policy Committee member contributions even as Governor Bailey’s press conference came through more balanced.

The analysis says the MPC remains focused on inflation persistence, second-round effects, and possible inflationary impacts from higher energy prices and geopolitical risks, but it also pushes back against expectations for an imminent rate hike.

MUFG highlights that several members remain firmly in hawkish conviction territory, while others represent the dovish wing, leaving the committee modestly hawkish overall.

For the pound, the analysts conclude the communication remains supportive, but Bailey’s explicit pushback against the idea that the MPC is edging toward a hike limits potential upside.

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