The Bank of England kept interest rates steady on Thursday and has hinted that the British economy has recovered since the December elections. And the strong global economy. Which means that no further stimulus was needed now. The Monetary Policy Committee voted to keep the interest rate at 0.75%.
The central bank kept the door open for action. After Governor Mark Carney handed over his successor, Andrew Bailey, in March.
“The policy may need to reinforce the expected recovery in UK GDP growth if positive signals from recent indicators of global and local activity do not persist, or if local price indices remain relatively weak,” the Bank of England said in its quarterly monetary policy report.
Britain will officially leave the European Union at 23:00 GMT on Friday, and an 11-month transition period begins during which Britain needs to negotiate a long-term trade deal with the European Union or face a tariff on its exports from 2021.
He added that the decline in immigration and weak commercial investments would affect the economy.
Inflation is expected to remain below the Bank of England’s 2% target for the next three years if rates remain at 0.75%. The Bank of England’s forecast, based on market expectations for a 0.5% rate cut this year. Suggests inflation is slightly above target.
GBPUSD recovered from 1.2988 – critical support – at the moment trading around 1.3107 levels. Resistance comes at 1.3118/1.3150 levels. (hard to break). Anyway; above 13150 aims the 1.3210 levels. A halt is likely, it may test 1.3150 before attempts to break higher.
On the downside, the GBPUSD needs to break and hold below 1.2988 levels to prevent a return to the upside.
In conclusion: The GBPUSD remains trapped within 1.2988-1.3150 range…
Support: 1.2988, 1.2895, 1.2840, 1.2790, 1.2705
Resistance: 1.3055, 1.3118, 1.3150, 1.3210, 1.3275