The Bank of England has maintained its interest rate at 5.25%
In order to achieve its 2% inflation target, at its meeting on November 1, 2023, the Monetary Policy Committee (MPC) of the Bank of England decided by a majority vote of 6-3 to keep the bank rate at 5.25%.
Global economic growth remains sluggish, despite stronger-than-expected GDP growth in the United States. Inflationary pressures within developed economies remain high, and events in the Middle East have led to an increase in oil prices. The UK's GDP growth has weakened, with a forecast of steady growth in the third quarter of 2023 and a projected 0.1% growth in the fourth quarter, which is weaker than previously expected. There is uncertainty in the labor market, and employment growth is expected to slow down in the second half of 2023.
Currently, wage growth in the UK remains relatively high across multiple indicators, but the inflation rate is still well above the 2% target. According to the market's expected path of interest rates, CPI inflation is projected to return to the 2% target level by the end of 2025. Monetary policy may need to remain tight for a considerable time to ensure inflation returns to the target.
However, there is a division within the committee on the question of whether to raise interest rates, with six members in favor of maintaining the rate at 5.25% and three members leaning towards raising the rate to 5.5%. Overall, the Bank of England expects inflation to gradually decline, but there are still upside risks to inflation.
GBPUSD
, it has moved up from 1.2100 and is currently approaching 1.2200. The focus is on the resistance level at 1.2200. If it breaks through and holds, there may be a continued push towards 1.2300. Without a breakthrough or holding above 1.2200, the GBP/USD pair is expected to continue oscillating within the range of 1.2000 - 1.2200.
Global economic growth remains sluggish, despite stronger-than-expected GDP growth in the United States. Inflationary pressures within developed economies remain high, and events in the Middle East have led to an increase in oil prices. The UK's GDP growth has weakened, with a forecast of steady growth in the third quarter of 2023 and a projected 0.1% growth in the fourth quarter, which is weaker than previously expected. There is uncertainty in the labor market, and employment growth is expected to slow down in the second half of 2023.
Currently, wage growth in the UK remains relatively high across multiple indicators, but the inflation rate is still well above the 2% target. According to the market's expected path of interest rates, CPI inflation is projected to return to the 2% target level by the end of 2025. Monetary policy may need to remain tight for a considerable time to ensure inflation returns to the target.
However, there is a division within the committee on the question of whether to raise interest rates, with six members in favor of maintaining the rate at 5.25% and three members leaning towards raising the rate to 5.5%. Overall, the Bank of England expects inflation to gradually decline, but there are still upside risks to inflation.
GBPUSD
, it has moved up from 1.2100 and is currently approaching 1.2200. The focus is on the resistance level at 1.2200. If it breaks through and holds, there may be a continued push towards 1.2300. Without a breakthrough or holding above 1.2200, the GBP/USD pair is expected to continue oscillating within the range of 1.2000 - 1.2200.