BOE's Bailey:
- I don't think ill health is the main reason why people have left the labor market
- main difference between BOE and IMF forecast is IMF expects UK growth to pick up faster after this year
- private sector wage settlements have been higher than expected
- pay settlements will be very important for future inflation and policy
- consumers are becoming more resistant to higher prices
- Firms are saying they expect pay demands to ease over course of 2023
BOE's Broadbent:
- we do not fully understand why UK labor force participation has not recovered as in other countries
- we think negative effects of rags that are coming in faster than expected, but not necessarily larger in total
- factors weighing on UK growth will not be there forever
- collectively it is not possible for everyone to call back losses from inflation
As the press conference continues, the UK 10 year yields have extended their drop and have fallen to the lowest level since December 10. That's down about 16 basis points on the day
The expectations from the OIS market is now projecting that the terminal rate is leaning more toward 4.25% bank rate peak in 2023 versus 4.5%.
Looking at the GBPUSD, the price of the pair moved down on the headlines, but has so far found support buyers near the lows from January 24 at 1.22613. There is a swing area and the 38.2% retracement between 1.2209 and 1.22247.
GBPUSD remains confined in the up and down range