NEWS / Foreign Exchange

BoE Meeting Preview

The Bank of England is in everyone's mouth as its decision is seen key for the short term future of the GBP. The majority of the analysts surveyed consider that the Bank will rise interest rates by 25bp its actual 5.25% to 5.50%, overtaking the benchmark rate in the US for the first time in two years.

Inflation woes, solid growth and consumer demand are the keys in which this decision should be based, analysts agree on. However, the impications of a further tightening policy with the housing market at record highs and Account&Trade Deficits on the rise, could not be that good for the economy in the UK region.

Check the effect that the meeting will have on the pairs in our Rates and Charts Section or compare the movements of the different banks in our World Interest Rates Table.

• Monetary Policy Committee (MPC) at BoE
• Official Bank Rate history at BoE

In-Depth Analysis

• Currency Journals - Currency Journal: Cable up over Shadow MPC rate hike by Performance Capital
• Forex Trading Strategies - GBP Rallying On Rate Speculation by Saxo Bank

Related News

• BoE set to keep rates on hold but hike would not come as a surprise (AFX News)
• UK interest rate rises have little effect on buy-to-let market - Paragon (AFX News)
• Forex - Talk of two dollar pound resurfaces ahead of BoE rate decision (AFX News)

Analysts' comments

• Geraldine Concagh, economist at AIB Group Treasury:
  "Sterling has been relatively strong as the market is speculating that we could get a hike tomorrow. If we don't get a rate hike there could be a reversal of the pre-meeting gains, but the market is still discounting for a tightening at some point." - Reuters
• George Buckley, economist at Deutsche Bank:
  "A hike can be justified by higher inflation measures across the board, generally upbeat activity since the January rate rise, the continued strength in the euro area economy, robust domestic demand, high money supply growth and rising household borrowing." - AFX News