Live Coverage: Bank of England expected to hold rates ahead of elections, GBP/USD set to rock
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UNLOCK OFFERThe Bank of England (BoE) is set to leave interest rates unchanged – if only because of the UK general elections on July 4. Nevertheless, comments about the latest economic developments are set to rock the Pound.
FXStreet Premium allows subscribers to participate in the coverage and ask analysts questions live.
Why the Bank of England decision matters
The Bank of England has influence beyond the UK's borders. As one of the oldest central banks in a country that trades with the entire world, changes in interest rates impact the Pound, the Euro, and even the US Dollar.
The "Old Lady," as the BoE is also known, has been holding interest rates at 5.25% for long months, waiting to be convinced that inflation is falling. In its latest meeting in May, two members of the Monetary Policy Committee (MPC) voted in favor of cutting rates. Still, seven others, including Governor Andrew Bailey, opted to hold them unchanged.
An interest rate cut in the Eurozone and an increase in the unemployment rate to 4.4% in April support easier monetary policy, while a small rise in an elevated core Consumer Price Index (core CPI) of 3.5% in May is a source of caution. Headline CPI stood at 2% last month, at the BoE's 2% target.
Then came the decision about a snap election in the UK on July 4, which caused policymakers to suspend all public appearances. Due to the upcoming elections, another no-change decision is widely expected.
Nevertheless, the Meeting Minutes from the decision will show the bank's views on recent economic developments and may provide a clue about the probability of a rate cut in August. There is a high probability that all members will vote to hold – only due to the elections – but the text is critical to understanding the BoE's thinking. GBP/USD is set to rock.
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The Bank of England (BoE) is set to leave interest rates unchanged – if only because of the UK general elections on July 4. Nevertheless, comments about the latest economic developments are set to rock the Pound.
FXStreet Premium allows subscribers to participate in the coverage and ask analysts questions live.
Why the Bank of England decision matters
The Bank of England has influence beyond the UK's borders. As one of the oldest central banks in a country that trades with the entire world, changes in interest rates impact the Pound, the Euro, and even the US Dollar.
The "Old Lady," as the BoE is also known, has been holding interest rates at 5.25% for long months, waiting to be convinced that inflation is falling. In its latest meeting in May, two members of the Monetary Policy Committee (MPC) voted in favor of cutting rates. Still, seven others, including Governor Andrew Bailey, opted to hold them unchanged.
An interest rate cut in the Eurozone and an increase in the unemployment rate to 4.4% in April support easier monetary policy, while a small rise in an elevated core Consumer Price Index (core CPI) of 3.5% in May is a source of caution. Headline CPI stood at 2% last month, at the BoE's 2% target.
Then came the decision about a snap election in the UK on July 4, which caused policymakers to suspend all public appearances. Due to the upcoming elections, another no-change decision is widely expected.
Nevertheless, the Meeting Minutes from the decision will show the bank's views on recent economic developments and may provide a clue about the probability of a rate cut in August. There is a high probability that all members will vote to hold – only due to the elections – but the text is critical to understanding the BoE's thinking. GBP/USD is set to rock.
Live financial market coverage
FXStreet covers major economic releases in a live blog format, to provide readers an instant verdict of the data, rapid analysis of key assets, and, for Premium members, the ability to ask our experts questions in real time.
FXStreet Premium
FXStreet Premium provides subscribers access to analysts, exclusive actionable analysis, signals, Ed Ponsi's webinars, trade plans, and a bullish/bearish indicator for Gold on critical events. Join FXStreet Premium here.
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