Old Lady Sees Cuts In Play / Vatican Archives
Once again, the Old Lady followed the Fed with its decision to keep interest rates unchanged at 5.25%, whilst leaving the door open for future rate cuts as inflation continues to fall. The Monetary Policy Committee (MPC) reached an 8-1 consensus to maintain the current rate, with a solitary vote in favour of a 25bp cut. Notably, for the first time in this current cycle, there were no votes for an increase in rates, contrasting with the prior meeting where two members had supported a quarter-point rise.
Governor Andrew Bailey was optimistic that the Bank of England was on the right trajectory. "Recent weeks have brought additional promising signs of a decrease in inflation" he said. Adding: “We've chosen to keep the rate at 5.25% today as we await confirmation that inflation will stabilise at our target of 2% and remain there. While we're not ready to lower interest rates just yet, we are moving in the right direction."
According to the MPC's report released alongside the numbers: "The significant fall in headline CPI inflation is partly due to base effects and external impacts on energy and goods prices." The report further mentioned that the restrictive monetary policy currently in place is impacting the real economy by moderating activity, easing the labour market, and diminishing inflationary pressures. Yet, it also acknowledged that "indicators of persistent inflation are still high."
This morning, we had UK retail sales coming in stronger-than-expected in the first two months of the year as the wet weather prompted consumers to buy clothing and more goods over the internet. Sales were flat in February, against a consensus of -0.4%, and annually they were down -0.4%, versus estimates for -0.8%. “There was growth in clothing, which rebounded after recent falls as people invested in the new season’s collections, as well as department stores,” said Heather Bovill, a senior statistician at the ONS.
Lastly, it has been reported that in a glass case deep in the Vatican archives lies the original 1530 letter sent by British nobles urging Pope Clement VII to grant Henry VIII an annulment so he could marry Anne Boleyn. The only reason it has survived, according to retiring chief archivist Bishop Sergio Pagano is that when Napoleon sacked the Vatican archives in 1810 and carted the contents off to Paris, the then-chief archivist took the letter, rolled it up, and hid it in a secret drawer in a chair in the archive’s antechamber.
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