After numerous media leaks this morning that the Bank of England would address the historic, record drop in sterling - and, according to some, perhaps even intervene - moments ago the BOE issued a brief statement which is certain to disappoint anyone hoping for some imminent action from the central bank.
Full statement from Andrew Bailey, Governor of the Bank of England: https://t.co/GzbJQ6MaNK pic.twitter.com/I3gPAow1NW
-- Bank of England (@bankofengland) September 26, 2022
Here is the full 3-paragraph statement:
The Bank is monitoring developments in financial markets very closely in light of the significant repricing of financial assets.
In recent weeks, the Government has made a number of important announcements. The Government's Energy Price Guarantee will reduce the near-term peak in inflation. Last Friday the Government announced its Growth Plan, on which the Chancellor has provided further detail in his statement today. I welcome the Government's commitment to sustainable economic growth, and to the role of the Office for Budget Responsibility in its assessment of prospects for the economy and public finances.
The role of monetary policy is to ensure that demand does not get ahead of supply in a way that leads to more inflation over the medium term. As the MPC has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government's announcements, and the fall in sterling, and act accordingly. The MPC will not hesitate to change interest rates as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit.
Not surprisingly, with the BoE confirming just how toothless the central bank has become in light of the current FX crisis, just as we warned earlier...
*BANK OF ENGLAND EXPECTED TO MAKE A STATEMENT TODAY: SKY NEWS And say what? "we give up"
-- zerohedge (@zerohedge) September 26, 2022
... cable is now tumbling as expected, and - absent any imminent intervention from the BOE - is likely to take out its overnight lows shortly.