A Reasonable Day for Britons
The Bank of England is likely to keep interest rates unchanged during the June meeting.
Inflation, which turned out to be a smaller threat to the economy than previously expected, began to fall at the time of expectations regarding the de-escalation of the conflict between the United States and Iran.
An eventual pause in the actions of the British central bank would mean keeping rates at 3,75%.
Investors, as noted by Bloomberg, factor in one 0.25 percentage point hike this year, but many economists believe the next move could be a cut.
According to the April statement of the Monetary Policy Committee (MPC), the central bank will “continue to closely monitor the situation in the Middle East and how its effects spread through the economy.”
Deciders also added that the “Committee is ready to take necessary actions to ensure that CPI inflation stays on a path toward achieving the 2% target in the medium term.”
Recent information indicates that the United States and Iran have agreed on the content of a 14‑point settlement protocol, under which the conflict parties will end the exchange of fire.
Donald Trump, who confirmed success in talks, still warns that if Tehran fails to keep its promises, Washington is ready to bomb the country again.
In recent months, the blockade of the Strait of Hormuz and attacks on energy infrastructure have raised oil prices and caused chaos in global financial markets, raising uncertainty about the future inflation path and monetary policy of many central banks.
The Federal Reserve for the first time under the leadership of Kevin Warsh decided to keep rates unchanged during the June meeting.
A key aspect of the upcoming Bank of England announcement remains the political crisis triggered by the potential change in the UK Prime Minister’s position.
“The victory of Manchester mayor Andy Burnham in the ongoing supplementary elections in Makerfield today would pave the way for him to replace struggling Prime Minister Keir Starmer,” Bloomberg reports.
“The markets fear, that Burnham’s government may introduce loose fiscal policy that fuels inflation,” added.
Source: Trading Economics.
Also read: Dollar rate on a long road to 4 PLN? Expert issued forecasts for USD/PLN and EUR/USD. “The dollar may gain”
See also: Will the dollar surprise again? Expert issued a forecast for USD/PLN and EUR/USD. “It’s hard for me to believe there will be no more fires”
Pound rate before the Bank of England decision
The British pound to the zloty on Thursday, June 18 is at 4,91 PLN (+0.1%).
Chart. Pound to zloty (GBP/PLN)
Source: Trading Economics.
The euro to pound rate reaches 0,86 GBP (+0.16%).
Chart. Euro to pound (EUR/GBP)
Source: Trading Economics.
The pound to dollar rate hovers around 1,32 USD.
Chart. Pound to dollar (GBP/USD)
Source: Trading Economics.
Also read: Dollar rate before the chance to break out? Expert: “Capital will flow back to USD”
See also: Dollar rate before the “nervous and dynamic” move, euro waiting to fall? Expert issued forecast for USD/PLN and EUR/USD
Source: Bloomberg.
