The Pound fell after the BoE meeting. Overview for 02.02.2017

On Thursday, the GBP/USD pair is moving downwards significantly after the February meeting of the Bank of England.

The British Pound is getting weaker against the USD on Thursday afternoon. The current quote for the instrument is 1.2550.

The February meeting of the BoE ended the way it was expected to. The interest rate remained unchanged at 0.25%, the Quantitative Easing program was also left intact at £435B. In the comments, the regulator emphasized that the monetary policy of the United Kingdom would be flexible and able to move in any direction: if consumer spendings fall, the BoE will find reserves to decrease the rate. However, if salaries and consumer spendings grow, the rate will be increased sooner or later.

The economy estimations were rather mixed. For example, the UK GDP forecast for 2017 was improved, now it’s 2% after the previous expectation of 1.4%. Forecasts for 2018 and 2019 were a bit increased as well. The labor market is also doing fine: the average unemployment rate is predicted to be 4.5% against the previously forecasted 5%.

However, opinions concerning the inflation are different. The comments of the Bank of England say that some of the regulator’s members’ attitude towards the high inflation is reaching “the edge”. The CPI estimations wasn’t changed; it was mentioned that the low utilization of production capacities prevented the inflation form growing.

Investors’ grim mood after the BoE meeting was a bit improved by the reports on the construction sector, but the market continues to analyze the behavior of the Central Bank. Such statements as were made today are very unusual for the Bank of England, because the regulator either watches without interfering or analyzes after interfering. Today’s comments about the readiness to revise the interest rate in both directions rise more questions than they answer.

RoboForex Analytical Department