GBP/USD view ahead of BoE interest rate decision

Expectations are for the BoE to hold rates and maintain their current QE programme, while increasing their growth estimates (HSBC are expecting 2017 GDP to be revised higher to 1.7% from 1.4%). The reason for this upgrade is the slew of positive data we have seen since the last meeting. This month alone both GDP and CPI beat expectations on a Y/Y and Q/Q basis, and the all important Services PMI printed a large 56.2 versus expected 54.7. This is one of the most important data releases due to the services sector accounting for around 79% of the UK's GDP. These economic indicators are just a few of many key data releases that have beat expectations this month. UK data has been somewhat very strong since the Brexit vote last year, and yesterday PM May's Article 50 draft law passed the first vote in Parliament. So if the economy is performing well and concerns about leaving the EU is subsiding, why is a rate increase in the near term being played down? Firstly, the BoE have on a number of occasions stated they have a neutral stance, so first we would have to see them shift to a more hawkish stance. Alongside this, a near term hike would prove that the BoE were hasty to cut rates, and could damage their credibility, with Carney recently playing down the UK economy as he said he sees slower growth over the forthcoming years. GBP/USD is at a key level so this BoE could help form a double top, or provide further catalyst for the bulls.