Earlier today, Huw Pill of the Bank of England stated his preference for a more steady-handed approach and cautions against raising interest rates.
In his words to the spectators after his speech at the Qatar Centre for Global Banking and Finance 2022 Conference at Kings College London, “One-off bold moves can be disturbing in terms of their impact on financial markets. And that the Bank of England shun its “jerking around Bank Rates” reputation, which they have received from response to temporary economic news to gain investors’ trust.”
If the bank continues to engage with short-term news, there would be confusion; it would be difficult to sieve the noise from the real deal, which would disrupt the understanding of monetary policy.
Remember, earlier today, we reported on how the fears over an increase in energy prices has caused the fall of Euro, crashing it to its lowest since December 2002.
So the question on the mind of investors and traders would be, which policy will I follow and how would these policies further affect the foreign exchange market?