At lunchtime today the Bank of England will provide its first interest rate decision and Inflation Report for the year. Although no interest rate changes are expected, owing to the Brexit due date being just around the corner, I expect the talks afterwards to be watched very closely.
The current 0.75% base rate is expected to remain the same for some time, as the uncertainty surrounding Brexit and impact to the UK’s economy is likely to have a knock of effect on the monetary policy decisions made by Bank of England. For this reason I’m expecting to see all 9 members of the monetary policy committee to vote against a rate hike, but there could still be market movement for the Pound. Following the results of the vote, the Governor of the Bank of England Mark Carney will be speaking, and depending on his comments we could see market movement. If he alludes to potential hikes in future, should the UK’s separation from the EU go smoothly, I think we could see a spike upward in the Pound’s value and likewise, if he warns against a no-deal Brexit and highlights the potential downsides I think we could see a sell-off in the pound’s value against the likes of the US dollar and the euro.
Updates on the meetings between the UK’s Prime Minister, Theresa May and EU officials such as the European Council head Donald Tusk and European Commission head Jean-Claude Junker are other potential market movers.
There has also been talk of the next meaningful vote on May’s deal being postponed until the end of the month, whereas originally the plan had been for a vote next week. What the vote will be about is hard to say as May has been seeking ‘alternative arrangements’ on the Irish backstop which so far hasn’t gone very well according to media reports.
This afternoon there will also be economic data releases on the US jobs market which could impact the GBP/USD exchange rate. This data will be released at 13.30.
Please feel free to register your interest if you wish to be updated in the event of a major market movement. I’ll be happy to get in touch personally and discuss you query.