BOE Ramsden: there will likely be obstacles in the disinflation process

BOE Deputy Governor Ramsden speaks and says:

• The disinflation process is likely to encounter irregularities from month to month.
• Over the past few months, I have become more confident in the evidence that risks to persistence and domestic inflationary pressures are fading.
• The balance of domestic risks to the UK inflation outlook is now tilted to the downside.
• The balance between domestic risk and the UK inflation outlook relative to the February MPR forecast is now tilted to the downside.
• This leaves the UK less ahead than behind in terms of recent inflation performance.
• Scenario where inflation remains close to the 2% target over the entire forecast. At least as likely
• We can be confident that headline CPI inflation will fall sharply in April, moving closer to the 2% target.
• The British labor market has clearly continued to relax

The comments are more conciliatory.

The next UK CPI will see a monthly rise of 1.6% excluding the year-on-year calculation. As a result, if the monthly figure for the month stands at 0.4% as an example, one could expect a sharp decline of over 1% year-on-year. Hence the confidence in a sharp drop in inflation over one year.

GBPUSD remains just below its midpoint of 50% upside from the October 2023 high. This level stands at 1.24646. The current price is trading at 1.2447 after testing and holding the median level during the US session. Staying below is more bearish.