“Every performance is different. That’s the beauty of it.”
There has been a striking shift in recent Bank of England (BoE) communication. In the minutes of its September meeting, policy makers noted that "some withdrawal of monetary stimulus is likely to be appropriate over the coming months." This message was then reiterated in speeches by noted "dove" Gertjan Vlieghe and Bank Governor Mark Carney. In response, investors have drastically revised their expectations for the timing of the first rate hike since 2007 from several years away to perhaps as soon as November. What has caused this major shift in the Bank’s tone, and how is policy likely to evolve from here?