Apparently some senior staff at the Old Lady are uncomfortable with Merves’ endorsement of government’s spending cuts, feeling he has overstepped the line seperating monetary and fiscal policy.
Sterling’s looking a little peeky in early European trade, cable having slipped back below 1.6000, while EUR/GBP is up at .8625 from early .8605.
All eyes will now be on the release of Bank of England’s latest quarterly inflation report at 10;30 GMT and King’s accompanying press conference.