BOE Ramsden: There are likely to be bumps in the disinflation process

BOE Deputy Gov. Ramsden is speaking and says:

• There are likely to be bumps in the disinflation process from one month to the next.
• Over the last few months, I have become more confident in the evidence that risks to persistence and domestic inflation pressures are receding.
• Balance of domestic risks to the outlook for UK inflation is now tilted to the downside.
• Balance of domestic risk to the outlook for UK inflation relative to the February MPR forecasts, is now tilted to the downside.
• This leaves the UK as less of a outliner and more of a laggard in terms of recent inflation performance.
• Scenario where inflation stays close to the 2% target over the whole forecast. At least as likely
• We can be confident headline CPI inflation will fall sharply in April, to close to the 2% target
• UK labor market has clearly continued to loosen

Comments are more dovish.

The next CPI in the UK will have a 1.6% Month on Month rise drop out of the YoY calculation. As a result, if the month on month number for the month comes in at 0.4% as an example, a sharp decline of over 1% in the YoY could be expected. Hence the confidence that inflation for YoY will come down sharply.

The GBPUSD remains just below its 50% midpoint of the move up from the October 2023 high. That level comes in at 1.24646. The current price trades at 1.2447 after testing and holding the midpoint level in the US session. Staying below is more bearish.