The Monetary Policy Committee (MPC) of the BOE is going to meet this Thursday and the consensus forecasts, similarly to the case above, do not project a change to the interest rate in the UK, which is currently at 0.75 per cent.
Even so, there are reasons to believe that the MPC would become even more dovish, which could prompt them to cut the rate by the end of the year.
During the previous two monetary policy meetings, two out of the Committee's nine members voted for an immediate reduction of the interest rate. If this trend is preserved on Thursday, the pound is likely to take another hit.
The MPC has to consider geopolitical factors in addition to the economic situation in the Kingdom before it can reach an agreement on the appropriate interest rate.
Even though global trade tensions have stabilised moderately, Brexit is due to take place on January 31st, just one day after the monetary policy meeting.
Due to the fact that the UK still lacks a trade deal with the EU despite Boris Johnson’s recent promises, there is considerable uncertainty surrounding the near-term future of the British trade dealings with the bloc.
Meanwhile, the pound is currently experiencing a strong losing streak, with the GBPUSD presently testing the strength of the major support level at 1.29900.
GBPUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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