2-0-7 - something new for the BOE

2-0-7 - something new for the BOE

The Bank of England released an interest rate. As expected, it was left on hold at 0.5%. However, this time votes were divided: 7 members voted to keep the rate unchanged when 2 voted to hike. It can signal the rate increase in May. Moreover, the governor Mark Carney said that the prospects of excess demand over the forecast period, an ongoing tightening of monetary policy can support the inflation return to its target.

However, the statement contained mixed data. Let’s see.

  • CPI inflation fell from 3.0% to 2.7% in February. And it is supposed to fall further, but it will stay above 2.0%.
  • Pay growth continued to increase. And it is anticipated to rise further based on the tightening labor market. So growth in wages and unit labor costs will rise in the future.
  • The unemployment rate stayed low.
  • US GDP growth was weaker in the fourth quarter but the central bank sees indicators of exports and investment point to a stronger picture.
  • Carney did not leave Brexit negotiations out of attention. According to the BOE’s release, Brexit will stay a source of uncertainty, weighing on households, businesses and asset prices.

Although we can anticipate a tighter monetary policy and soon rate hike, the Governor said nothing concrete. The statement was quite vague. Furthermore, investors anticipated the rate hike in May, so it did not become a surprise. As a result, the pound has weakened. If the greenback is able to recover, the sterling will fall further. The support lies at 1.4070.

GBPUSDDaily.png

gbp

Similar

News to trade on December 11

Today the British PM Theresa May plans to discuss the current conditions of the Brexit deal with the European leaders. Is it happening again? What else will move the world of Forex today? Read the news!

China property will decelerate in 2019

In 2019, China's massive property market is anticipated to speed down further, with smaller price leaps as well as diving home sales contributing to pressure on the world's number two economy, according to a Reuters survey…

Japanese economy contracts most for four years

In the third quarter, the Japanese economy shrank the most for more than four years due to the fact that Japanese companies reduced spending, thus threatening to affect the investment outlook next year because the export-reliant Asian country grapples…

Latest news

Japan real wages surge is slowest in almost two years

Japan's March real wages went down at the fastest pace in nearly two years, weighed by minor nominal pay lifts as well as a moderate ascend in consumer prices, thus posing a setback for Prime Minister Shinzo Abe's tries to revitalize the Japanese…

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera