BOE Dhingra: We are already at high level of monetary policy restrictiveness

• We are already at high level of monetary policy restrictiveness
• Medium-term inflation pressures are easing.
• Food prices are taking up, but not seeing the same rise in import costs as before.
• UK consumption is unusually wesk in Europe given high savings rate.
• I think a lot of UK weakness is due
• Consumption spending is not a driver of growth in Britain, unlike US or euro zone.
• Levels of capacity utilization in UK point to weak demand rather than supply problems.
• Everyone on MPC has a different definition of pace of rate cuts implied by gradual
• My definition of gradual rate cuts does not mean 25 basis points per quarter.
• When I look at wage data, I’m not sure what to take from it due to lack of converge of the self-employed and small businesses
• if you can cut rate by 25 basis points at a quarterly pace, you’ll still be at restrictive territory all this year

The GBPUSD is trading back above its 100 hour moving average at 1.2626, but below its 100 day moving average of 1.2655

The price moved above its 100 day moving average on Thursday and Friday and again today in reaching a new swing high at 1.2687.

The low price today moved back to test the broken 38.2% retracement of the move down from the September and a swing area between 1.2596 and 1.26147. That level comes in at 1.2607.

This article was written by Greg Michalowski at www.forexlive.com.