UK: Data releases will be critical - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that in UK, key releases of CPI, labour/wages and retail sales are due into the BoE MPC announcement. 

Key Quotes

“Parliament’s return from recess sees heightened political tensions around EU Brexit talks, the Great Repeal Bill and PM May’s leadership. Perversely GBP is finding support as shorts are cut on the potential for a softer Brexit or even a second referendum, however unlikely this may be. The UK party conference period begins this month and Labour’s withdrawal of Great Repeal Bill support and Tory moves against May could well be related to these conferences.”

“Next week’s data releases will be critical in assessing the risks to households and inflation as MPC meet. As noted, the level of uncertainty over Brexit is rising. Though initial reactions may be to cut positioning, such uncertainty is likely to limit GBP gains and then weigh on GBP post MPC.”