{"id":112798,"date":"2017-09-14T06:24:47","date_gmt":"2017-09-14T10:24:47","guid":{"rendered":"http:\/\/countingpips.com\/?p=112798"},"modified":"2017-09-14T06:24:47","modified_gmt":"2017-09-14T10:24:47","slug":"what-to-expect-from-the-boe","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/09\/what-to-expect-from-the-boe\/","title":{"rendered":"What to expect from the BoE?"},"content":{"rendered":"
September 14, 2017<\/div>
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Article by ForexTime<\/a><\/p>\n

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Today\u2019s Bank of England Monetary Policy Committee (MPC) announcement is the main event of the week. While it is highly unlikely that we will see an immediate interest rate hike, or a reduction in quantitative easing, the markets\u2019 biggest question following the rise in inflation, is whether the central bank will finally provide signals of tightening monetary policy.<\/p>\n

Back on 3 August, \u00a0when the BoE last met, the MPC voted by a majority of 6 -2 to maintain rates at 0.25%. They also expected inflation to peak around 3% in October, which is where we almost stand now. BoE Governor Mark Carney suggested that markets are underestimating how soon interest rates will rise. However, investors are still unconvinced that an interest rate hike will come anytime soon, primarily because BoE\u2019s Chief Economist Andy Haldane did not vote in favour of this during the last meeting, despite sending signals of his readiness to vote for a hike; that is why his call today will be of great importance.<\/p>\n

Economic data since the last meeting has been somewhat mixed. The weak sterling continued to support the manufacturing sector, with IHS Markit\u2019s Purchasing Manager Index rising to 56.9, a four-month high, suggesting that manufacturing remained healthy despite Brexit uncertainty.\u00a0 The service sector however, which dominates the U.K.\u2019s economy and contributes around 80% of the total GDP, slowed to 53.2 in August, down from 53.8 the previous month.\u00a0 More importantly, consumer spending remained weak despite the uptick in August, as higher prices and lower disposable income continued to affect U.K. consumers.<\/p>\n

The brightest spot in the economy has been unemployment levels, which fell to a new 42-year low of 4.3%, news that was warmly welcomed by the MPC. However, low wages remain the BoE\u2019s and other central banks biggest conundrum. With inflation hitting 2.9%, real wages remained in negative territory and there\u2019s no clear indication whether it will pick up soon.<\/p>\n

Mixed signals from the economy will provide ammunition to both hawks and doves, but traders need to know who will score more points today. If Andy Haldane sways to the minority of dissenters and voted for an immediate rate hike, it would signal that interest rates will go higher by the end of year, and GBPUSD will likely shoot above yesterday\u2019s high of 1.3328. However, if only two MPC members dissent, and inflation is given little attention, we may see Sterling slide back towards 1.30 -1.31 range.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime Today\u2019s Bank of England Monetary Policy Committee (MPC) announcement is the main event of the week. While it is highly unlikely that we will see an immediate interest rate hike, or a reduction in quantitative easing, the markets\u2019 biggest question following the rise in inflation, is whether the central bank will finally […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-112798","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112798","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=112798"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112798\/revisions"}],"predecessor-version":[{"id":112808,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/112798\/revisions\/112808"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=112798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=112798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=112798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}