country flagالعربية

What are the markets waiting for from the Bank of England

2017-09-14 09:45 am | No Views : 328

The Bank of England's interest rate on the pound is due today, and analysts' views on the possibility of a rate hike by the Bank of England are divided, especially after inflation reached 2.9%, well above the central bank's target.

Inflation rates are higher than the target of the central bank
Consumer prices rose mainly, excluding energy and food prices by 2.7% in August, due to the depreciation of the pound during the second quarter of the year. The pound has fallen by 10% since the Kingdom's exit referendum The United States of the European Union, or the so-called bricast.

And so high inflation, led to pressure on consumer spending, which recorded a performance of four years ago, lost wage growth rates in July at 2.1%, and if we calculate wage growth rates to include inflation rates, we find that in the negative region .

Britain's access to full employment rates
This raises questions. Although Britain has reached full employment rates, in addition to the unemployment rate reaching its lowest level in 42 years, at 4.3% in July, we do not see a rise in wage growth rates.

This is due to the devaluation of the pound, caused by the blurry vision on the BRIC, and the divisions within the British parliament over EU exit negotiations. There is no clear plan yet on how to exit and whether it will be a gradual exit or a difficult exit.

The head of the Bank of England, Carney, said in a previous interview that he can not prevent a decline in real income, which is meant by a decline in wage growth rates, including inflation, because that decline is due to the fluctuation of the BRICT negotiations.

Growth rates in the UK
Looking at growth rates in the United Kingdom, it is fairly stable, recording a rise of 0.3% in the second quarter of this year, but less than the two growth rates compared to the same period last year, which was 0.5%, lower than the growth rate in the quarter Last year, which recorded 0.7%

The decline in growth rates is due to the decline in the service sector in the United Kingdom, driven by rising inflation. It is worth noting that the service sector represents 75% of the British economy, while the British manufacturing sector benefited from the devaluation of the pound, For low production cost.

What are the markets waiting for from the Bank of England?
Markets are awaiting today's decision by the Bank of England, with expectations that the central bank will keep rates at 0.25%, and keep the asset purchase program unchanged at 435 billion pounds.
The focus remains on the members of the Central Monetary Policy Committee, lost, and I saw a share in the last meeting, as 2 members never agreed to raise interest rates. Will we see changes in the number of members agreeing to raise interest rates?

Janet lays between low inflation and higher interest rates Will China succeed in eliminating Bitcoin?
All Rights Reserved
Risk Disclaimer: Trading in foreign exchange market (Forex) includes the risks and the possibility of loss. That is why we are keen on providing the highest quality news and analysis concerning the different markets traded. The opinions expressed in the site indicate the opinion of the author only and not the views of the administration or the public, knowing that errors could be encountered and there is a possibility to commit them. Before starting to trade you should carefully consider your investment objectives, and review the level of experience and risk appetite. In some cases, possible high leverage can lead to loss of funds invested, so you can not invest money that you can not handle its possible loss. You should be aware of all the risks associated with foreign exchange trading and seek for advices from an independent financial advisor if you have any does not assume any responsibility after the occurrence of financial loss to the dealer and the user carries full responsibility for the losses resulting from the use of news, analysis and data on the site.