Foreign exchange analysts at Credit Suisse consider that the latest UK fiscal support package is an important indicator of medium-term economic direction with an activist government stance which will tend to fuel inflation over the medium term. It also considers that the market reaction signals a lack of confidence the Bank of England (BoE) will back strong monetary policy action to curb inflation and the Pound will suffer as a result. It notes; “We suspect the market’s base case is that the BoE will continue to find excuses for relative inaction, and that it will pursue a benign neglect policy for GBP.” Given this ... (full story)