Pound in focus with Bank of England decision and May/Juncker meeting…
It’s a big day for the Great British Pound as Mark Carney and co. offer another dose of insight into the health of the UK economy, while Theresa May heads over to Brussels to meet EU President, Jean Claude Juncker.
The Bank of England will keep interest rates steady at today’s announcement, maintaining the 0.75% level we’ve seen for a while now. We’re also due to see the Bank’s latest set of growth and inflation forecasts. In essence, the Bank have very little to be hawkish about; despite a robust labour market, the economy is notably slowing with the latest round of PMI data rather concerning. Further to this, Brexit negotiations aren’t going too well with PM May finding it hard to reopen talks regarding the Irish backstop. The Bank will not want to be too dovish though, after all, they’re releasing a fresh set of inflation forecasts; they would not want a significant drop in sterling, created by themselves, to be the reason their forecasts end up wide of the mark.
Today also sees Theresa May head over to Brussels to meet EU President, Jean Claude Juncker. The prime minister is finding it difficult to kickstart meaningful reengagement with the European Union. The EU appear to be playing hardball. Today’s meeting could hopefully open up a pathway to new discussions. The clock is ticking and there are already rumours the next meaningful vote, scheduled for the 13th February, will be delayed to the end of the month.
Overall, a lot for the pound to cope with today, just as it sits at its lowest level against the buck for a number of days.
Written by Viv Savani. 8:34am, February 7th 2019
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