Pound plunges as Bank of England holds interest rates and cuts growth forecast on 'Super Thursday'

The overwhelming risk for the Bank of England is that the economy stalls from a premature rate hike, according to Ben Edwards, fixed income manager at BlackRock.

He added:

"The only dynamic that may call for tightening of policy is excesses in consumer credit and the Bank of England has been clear that the FPC and not the MPC is the least blunt tool for that job."

According to ING, the takeaway for the markets from 'Super Thursday is "brace yourselves, winter is coming". Apparently that's a Game of Thrones reference which is completely lost on me. This extra comment that its foreign exchange strategist Viraj Patel makes a bit more sense to me:

"The slightly more cautious growth projections, the dichotomy of MPC views and a lack of coherent policy bias mean the bar for a 2017 policy move still remains pretty high; we continue to see a credible BoE rate hike debate being more of a 2018 story."

Britain’s powerful services sector accelerated a touch in July, raising hopes that the economy overall is now gathering steam.

Businesses reported accelerating growth in new orders from customers and said they are increasing the pace at which they take on extra workers to cope with the demand.

The purchasing managers’ index (PMI) from IHS Markit edged up to 53.8 in July, rising from 53.4 in June and beating economists’ forecasts.

Any score of above 50 shows business activity is rising.

Manufacturing growth has also picked up pace, although the construction sector is struggling to stay positive as companies in particular are cautious about signing large building contracts.

The survey “suggests that the economy has maintained the momentum that it gathered over the second quarter,” said Ruth Gregory at Capital Economics.

sourcehttp://www.telegraph.co.uk/business/2017/08/03/bank-england-super-thursday-dominates-markets-focus/