The Monetary Policy Committee of the Bank of England is scheduled to have a meeting on Thursday. The prevailing market forecasts do not project a likely change in the current interest level, which is expected to be maintained at the current 0.75 per cent level. The previous monetary policy meeting was held on the 1st of August and the interest rate was expectedly left unchanged.
“Since May, global trade tensions have intensified and global activity has remained soft. This has led to a substantial decline in advanced economies’ forward interest rates and a material loosening in financial conditions, including in the United Kingdom. An increase in the perceived likelihood of a no-deal Brexit has further lowered UK interest rates and led to a marked depreciation of the sterling exchange rate.” [source]
The inflation rate in the United Kingdom has recently risen with 1 point to 2.1 per cent, which is slightly above the BOE’s target level. The appreciation was mainly attributed to Brexit woes stemming from last month’s fears of a no-deal departure of the UK from the EU. At any rate, the current economic situation internally and the global political circumstances do not necessitate changes to the interest rate.
However, the GBPUSD pair was boosted last week following the release of new speculations regarding the DUP party’s willingness to amend the contentious Irish Backstop proposal, which was perceived by investors as clearing the way for renewed trade deal negotiations (you can read more about it here). Thus, the pair closed last week’s trading session at 1.24949, which is just below the fundamentally important resistance level at 1.25300.
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