BoE's Bailey: Expected recovery is supported by BoE rates and QE

Eren Sengezer FXStreet

"The uncertainty is expected to continue to reduce investment other things equal, weighing on the capital stock and productivity growth," Bank of England (BOE) Governor Andrew Bailey said at a webinar hosted by the Resolution Foundation on Monday.

Additional takeaways

"Stronger growth in potential supply supported by stronger investment and productivity growth will make the COVID recovery easier."

"Monetary policy has a role to play in ensuring there is sufficient growth in demand to match any increase in potential supply growth."

"Last week’s budget outlined a range of measures to support economic growth through significant investment in infrastructure, skills and innovation."

"The rate of new COVID infections is declining, vaccine programme is a huge achievement, there is light at the end of the tunnel."

"Expected recovery is supported by BoE rates and QE, amply justifies our current stance on monetary policy."

"We will continue to execute the announced programme of asset purchases which we expect to be completed by around the end of 2021."

"Encouraging that measures of inflation expectations have remained relatively stable in the UK."

Market reaction

The British pound showed no immediate reaction to these comments and the GBP/USD pair was last seen losing 0.08% on the day at 1.3830.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD hovers around 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot around 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold: Is the $5,000 level back in sight?

Gold snaps a two-day downtrend, as recovery gathers traction toward $5,000 on Wednesday. The US Dollar recovers from the overnight sell-off as rebalancing trades resume ahead of Fed Minutes. The 38.2% Fib support holds on the daily chart for now. What does that mean for Gold?

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.