The Bank of England is set to meet tomorrow for its interest rate decision. According to a Wells Fargo research report, the central bank is likely to stand pat tomorrow as well. The BoE has been firmly on hold since August against a backdrop of uncertainty over Brexit. Nevertheless, there have been growing signs of building pressures in the U.K. economy, and BoE policymakers have taken note.
If the cloud of Brexit uncertainty was not hanging over the U.K. economy, the BoE probably would have hiked rates by an additional 25 basis points since August to stave off incipient wage and wider inflation pressures.
“We remain of the view that the BoE will raise rates twice this year, a view that is predicated on a smooth resolution to Brexit uncertainty by the March 29 deadline. However, a delay in the Brexit process could lead us to change that view to one or zero rate hikes, unless a decisive plan emerges within the U.K. government to resolve Brexit uncertainty”, added Wells Fargo.
At 19:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -38.3798, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 165.91. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
