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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Bank of England is in no hurry to increase rates
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The Bank of England is in no hurry to increase rates

05.11.2015
The GBP/USD pair is trading under some pressure on Thursday - investors are to analyze the decision of the Bank of England and its comments.

On Thursday before the end of the November Bank of England meeting, the pound traded with almost no volume, but with a slight decrease. The current quote in the GBP/USD pair is 1.5332. Immediately after the announcement of the BoE the pound sharply weakened.

Thus, the Bank of England decided to keep interest rates at 0.5% per annum, as before. The resolution was passed by a majority vote, 8 "for" and one "against". In the following comments, the British regulator said that the current level of the key interest rate is "more than adequate" for the realization of the objectives for inflation. It was this remark that collapsed the pound - it seems that the Bank of England, true to its conservative long rituals, will at least let the US Federal Reserve go first and will allow other regulators to begin a season of high rates.

Expectations of the English Central Bank of the country's economic growth and inflation are reduced. In 2015, the regulator expects GDP growth of 2.7% (the earlier forecast was 2.8%). In 2016, the economy will expand by 2.5%. Inflation will be able to achieve the target value of 2% by the end of 2017.

In view of the new forecasts and clearer than before comments, market expectations will mingle in time – the interest rate hike may be postponed to the beginning of 2017. This factor will soon be one of the main catalysts of pressure for the GBP/USD pair.
 
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