Connect with us

Hi, what are you looking for?


Pound Climbs Ahead of BoE, but Policy Fireworks Unlikely: Experts By

Pound Climbs Ahead of BoE, but Policy Fireworks Unlikely: Experts

© Reuters.

By Yasin Ebrahim – The pound climbed against the dollar Wednesday, ahead of the Bank of England’s monetary policy decision due Thursday, but investors aren’t betting on any hawkish surprise.

rose 0.14% to $1.3967.

The U.K. economy continues to gather pace, and inflation – at 2.1% on an annualized basis – is running ahead of the central bank’s target, but the Bank of England, or BoE, is likely to point to temporary factors boosting inflation and ongoing uncertainty in its outlook for the economy as reasons to keep monetary policy on autopilot.

“[W]e do not expect any change to current policy or guidance at the forthcoming meeting,” Daiwa Capital Markets said in a note Wednesday.  

“Since the BoE published forecasts following its previous MPC meeting on 6 May, economic activity appears to have improved a touch ahead of expectations […] but the central bank will underscore again that the outlook for the economy, including the relative movements in demand and supply, remains highly uncertain,” it added.

The bank’s cautious view will be helped by the “recent pickup in new coronavirus cases – to more than four times the rate at the time of the MPC’s May meeting – and delay to further economic reopening reminders of the downside risks,” Daiwa added.

Others agree, and suggest the central bank will be keen to avoid dropping any hints that tighter monetary policy could soon be table.

“In reality, we don’t think the Bank will say anything particularly new on the timing of rate hikes at this next meeting,” ING said. “For now, we’re in the camp looking for the first rate hike in 1Q23.”

While a further upswing in price pressures could push inflation to 2.5% later this year, it is likely to “die down into mid-2022 as the reopening spikes of the next few months fade,” ING added. “That, in turn, reduces the pressure on policymakers to exit the current level of stimulus.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Cybercriminals Adopt the Blockchain to Broadcast confidential Messages A group of analysts from SophosLabs represents that programmers working the crypto-jacking malware, Glupteba, have been...


PUBG unban in India soon as PUBG Corp. Will The Government Of India Unban PUBG? PUBG Mobile was Ban in India, PUBG organization has...


A standard method to execute Bitcoin could be powerless against double-spending, the new examination has found. Blockchain sleuths at ZenGo, a wallet startup, have...

BlockChain News

HDD mining, also known as “storage mining”, is a process of obtaining cryptocurrency based on hard disk memory. Compared with traditional POW mining, hard...