Interview with Bank of England policymaker sends sterling lower

Sterling fell nearly half a cent against the dollar and gilts rose on April 21 after an exclusive Reuters interview with Bank of England policymaker Martin Weale. Weale has been one of the hawks on the Monetary Policy Committee but in the Reuters interview, he sounded a different note, conceding that Britain’s economic recovery had been disappointing and saying his future MPC voting would depend on the BoE’s forecasts in May: “First quarter GDP is likely to be weaker than many people, including myself, would have assumed.” Within hours, several City analysts sent notes to clients discussing the Reuters interview and arguing that it could mark an important shift within the MPC away from an early interest rate hike.