Sterling survives BoE member speeches (this time)..
Earlier today, MPC member Mann explained her reasons for her shock 50bp interest rate cut vote last Thursday. 'To get ahead of the slowdown' was the main take away from her speech with Mann suggesting she is taking an 'activist approach'.
Catherine Mann confirmed she believes the UK needs to have higher rates for longer (around the 3% mark for the near and foreseeable future). She argues it is more prudent to act forcefully early in the rate cutting cycle, rather than dragging out the process. Something significant to be aware of in the coming months..
Mann doesn't believe the inflation battle is over and that stagflation is a concern. This all therefore points to potentially serious Sterling weakness ahead if Mann continues her stance at the next BoE meeting and is able to persuade others to her view.
"Unjustified tariffs on the EU will not go unanswered, they will trigger firm and proportionate countermeasures" said ECP's Ursula von der Leyen earlier today. Details of these tariffs will only be revealed once the US announce theirs on the EU (expected some time next week).
EU trade commissioner Sefcovic explained that 'the US would be taxing its own citizens by imposing tariffs'. This is true, as it will raise costs for businesses and fuel inflation. It's for this reason we believe a deal will be had by EU/US on energy, to settle any negative trade wars ahead between the two nations (Euro positive).
For now, financial markets have shown little reaction to either statements, which is a bit of a rare occurrence, especially in the current hypersensitive environment.