Interest rate decision in the U.K today – Key for Sterling Will we see weakness or strength? My forecast

Today brings the BOE interest rate decision at 12:00pm and could be extremely important news for Sterling going forward, especially if we do see a surprise rate hike (which personally I think there is around a 25% chance of seeing)

The more likely outcome is that rates remain on hold once again and you may see minimal Sterlnig weakness following this due to a minority of investors taking a punt in advance that rates may go up, with the markets moving on rumour as well as fact this could well lead to Sterling weakness.

An interest rate decision is in general seen as positive for the currency concerned and a cut negative, however this is not always set in stone as a hike in the U.K could in the medium term cause major problems as many mortgage payments will rise and this could lead to further economic troubles further down the line.

In short, I think Sterling will actually have a reasonably positive day as early morning data was slightly better than expected, and even though it may cause probles later on, a hike in rate will cause some short term rapid Sterling strength.

Feel free to pop back on here later for the latest.

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