"Bank of England Governor Andrew Bailey has told the market that the Central Bank may not go back to providing hard guidance. Bailey was clearly stung by the criticism he received following the most recent meeting of the MPC.

He was accused of misleading the market by providing heavy hints that there would be a rate increase, only for the committee to vote 7-2 against raising rates.

It is hard to imagine what Bailey would gain from such a ruse and while he is the Governor, he is one of nine members who each have a view. Their independence is guaranteed by the fact that alongside the members of the bank’s senior management, there are four external members.

One of those external members, Jonathan Haskell, spoke yesterday of his view that a hike will become necessary if the labour market remains tight. In order for inflation to be controlled, higher wages will need to be matched by a commensurate increase in productivity, so the MPC will need to remain vigilant.

He went on to say that the path for interest rates is undoubtedly upwards, although he believes a rise in rates should be viewed as a symptom of economic recovery and not a panic move to control rising prices.

"

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.