At the Bank of England meeting on Thursday, central bankers will most likely focus on what will happen in the future. Market analysts are divided on the decision to raise the key interest rate tomorrow, and the likelihood of this happening is almost zero. BOE raised interest rates for the first time in a decade on November 2, the main reason being the strong rise in inflation in the country.
Generally speaking, economists believe that most of BoE members will vote to keep interest rates and quantitative facilities, taking into account the situation in the country after Brexit.
How will this affect GBP?
JP Morgan - we think GBP will experience increased volatility, but we do not expect a big move in both directions. Interest increases are very unlikely in 2018, and what remains for tomorrow's meeting. The pound will continue to move from the Brexit talks and the economic data coming from the island.
We expect increased volatility and a small change in the price of sterling and remain ready for a new solution in the Brexit talks.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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