United Kingdom Monetary Policy Report

Info

History

Chart

Impact:

High

Source: Bank of England

Next Release:

Date:

Period:

What Does It Measure?

The United Kingdom Monetary Policy Report (MPR) measures the Bank of England's (BoE) assessment of the UK economy and its monetary policy stance. It primarily focuses on inflation trends, economic growth, employment, and financial stability while assessing the effectiveness of monetary policy measures.

Frequency

The report is published quarterly, typically released in February, May, August, and November, and represents the BoE's final figure on economic projections and policy considerations.

Why Do Traders Care?

Traders closely monitor the MPR as it significantly influences expectations about future interest rate movements and overall economic health, which can affect the value of the British Pound (GBP) and UK equities. A hawkish report may lead to a stronger GBP and bullish market sentiment, while dovish insights could dampen investor confidence and exert bearish pressure.

What Is It Derived From?

The MPR is derived from a combination of economic data, including inflation rates, Gross Domestic Product (GDP) figures, labor market statistics, and qualitative analysis conducted by the Monetary Policy Committee (MPC) of the BoE. It incorporates forecasts based on extensive economic models and surveys of businesses and consumers.

Description

The MPR includes a comprehensive overview of current and projected economic conditions in the UK, alongside detailed analyses of inflation risks and the economic outlook. The report also discusses the MPC’s decisions regarding interest rates, providing insights into the rationale behind its monetary policy options and how these may evolve.

Additional Notes

The MPR serves as a coincident economic indicator as it reflects current economic conditions and outlook rather than predicting future events. It also relates closely to other reports, such as the Consumer Price Index (CPI) and Gross Domestic Product (GDP) data, and offers insights that resonate with trends in global economic reports.

Bullish or Bearish for Currency and Stocks

If the report indicates higher-than-expected inflation and the potential for tighter monetary policy, it may be classified as higher than expected: Bullish for GBP, Bearish for Stocks. Conversely, if it reveals lower-than-expected growth and inflation forecasts, it may lead to lower than expected: Bearish for GBP, Bullish for Stocks.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise