Bank of England: Cautiously optimistic with negative rates still on the table
Fiona Cincotta February 3, 2021 10:41 AM
No change in policy is expected. The BoE could endorse negative rates as a tool but are expected to steer clear of using them. With vaccine numbers ramping up the central bank could also sound cautiously optimistic on the outlook.
Thursday at 12:00 noon followed by Andrew Bailey’s press conference at 12:30
The Bank of England is not expected to move on policy when it makes its monetary policy announcement and updates the bank’s quarterly forecasts.
The BoE raised its QE purchases in November to £875 billion, up from £725 billion. The health of the UK economy has deteriorated further since the last meeting as the UK entered into its third national lockdown.
Whilst the central bank has refused to rule out cutting interest rates BoE Governor Andrew Bailey has put more distance between himself and a move into negative rates in recent comments. Meanwhile, other members on the monetary policy committee remain enthusiastic about the strategy.
GBP/USD technical analysis
Following another retest of the multi year top for GBP/USD of 1.3750 the price has rebounded lower. It has fallen below its 50 sma on the 4 hour chart and is currently being contained by the 100 sma at 1.3665.
Should 1.3660 hold, resistance at 50 sma at 1.3695 comes into play before the bulls look for another attempt on 1.3750.
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