The Pound is still being sold. Overview for 07.02.2018

GBPUSD remains under pressure; the NIESR report didn’t impress investors.

The British Pound continues weakening against the USD on Wednesday. The current quote for the instrument is 1.3887.

Earlier today, the National Institute of Economic and Social Research (NIESR) published an updated report on the economic outlook in the United Kingdom in 2018. According to expectations, the economy growth may be stronger than it was believed before. The GDP growth forecast is 1.9% against 1.7% earlier. One of the reasons why the NIESR revised its forecast was progress in the Brexit talks.

The institute said its calculations were based on a possibility that London might retain full access to the European market. If it does happen, it will be the best possible result of the negotiations that are lasting several months. However, one should understand that the Brexit talks will continue for another year and a lot of things may change over this period of time.

According to the NIESR, the CPI in 2018 will be 2.4%; in 2019, the indicator may decrease up to 2.0%. The institute was very careful in its inflation expectations earlier, so they continue being this way.

When it comes to the key rate, the NIESR is sure that by the middle of 2021 the Bank of England will increase the rate up to 2% and stop there.

In general, the report looks positive. However, it couldn’t support the Pound today, because investors’ attention is now focused on the USD behavior.

RoboForex Analytical Department