BOE Interest Rate Meeting: What About Inflation?

What about the pound and stocks?

The consensus among virtually all analysts is no major change out of the BOE.

Better GDP data last week wasn’t enough to push the GBPUSD over the 1,400 handle. The BOE is not too happy with a higher pound in the current environment. So, it’s unlikely to get any comment that might give it a boost.

On the other hand, we can expect Bailey to repeat the dovish tone that he’s maintained in recent interviews. Generally, this is interpreted as positive for stocks and negative for the pound.

But, given the environment of most other major trading partners of the UK having more risks associated with covid, even dovishness from the BOE isn’t likely to weigh all that much.

Unless, of course, Bailey catches the market by surprise and keeps talking about negative rates when pretty much everyone agrees that’s an outdated idea.

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