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The BoE holds its next policy meeting in the first week of February. What can we expect from the BoE and how will this affect the British pound?

Here is their view, courtesy of eFXdata:

MUFG Research flags a doubt on its call for a rate cut by the BoE at its Feb-4 policy meeting.

Further progress in vaccinations (a pick up in the daily rate) by the time the BoE MPC meeting takes place on 4th February may prove enough to hold off on any additional monetary easing. Certainly, the OIS market at the moment is not expecting action and that will help provide additional support for GBP,” MUFG notes.

“We had expected to have witnessed greater evidence of gridlock on trade across the border with the EU at this stage, and while there have been reports the evidence to date suggests it is not on enough of a macro-scale to warrant concern right now.  So a rate cut as we had expected on 4th February is looking less likely now,” MUFG adds.

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