Home GBP: Carney’s future in focus ahead of BoE meeting – MUFG
FXStreet News

GBP: Carney’s future in focus ahead of BoE meeting – MUFG

Analysts at MUFG Bank explained the Pound continues to benefit from hopes about a last minutes Brexit deal and another Article 50 extension. They expect the Bank of England to keep policy unchanged on Thursday.  

Key Quotes:

“The pound continues to trade on a firmer footing in the near-term with cable and GBP/JPY testing technical resistance at the 1.2500 and 135.00 levels respectively. The pound continues to benefit from building optimism over the potential for a last minute Brexit deal and more likely a short Article 50 extension which have both helped ease more immediate No Deal Brexit risks.”

“The FT has also reported today that Mark Carney maybe asked to extend his term as BoE Governor again if the UK’s exit from the EU is delayed. The prospect of election in the coming months is making the imminent naming of a successor less and less likely, meaning that the Governor Carney could be asked to extend his term beyond the 31st January. Similarly, we expect the BoE to maintain policy continuity at this week’s MPC meeting. The BoE is likely to remain in wait and see mode. Another short Brexit delay would encourage the BoE to leave policy unchanged for longer to see how Brexit developments play out.”

“Growth in the UK is weak but not yet sufficient to prompt a more immediate rate cut this year especially with rates already low and domestic inflation pressures building. Wage growth is now running at its fastest rate since pre-global financial crisis. It leaves the BoE as relatively hawkish compared to the ECB and Fed but it has offered little support for the pound given Brexit risk continues to dominate performance.”

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.