News that recession was short and shallow will have pleased the bulls, but the Bank of England looks ready to cut rates next month if the data let it
News that its home nation exited an unusually short and shallow recession in the first three months of this year has given bulls something to charge at. The United Kingdom’s 0.6%meeting at the Bank of England ended with rate setters clearly ready to reduce borrowing costs soon, assuming economic data will allow. With two of nine committee members already convinced that lower interest rates are needed now, a June reduction remains very much in play.
February’s earnings excluding bonuses rose at a rate of 5.6%. The central bank may well want to see this figure coming down before it can feel entirely comfortable with a rate cut.moves. April’s consumer and producer price data are both on tap. However, the week’s main event could be Fed Chair Jerome Powell’s scheduled speech on Tuesday. Clues on the Fed’s latest thinking are of course
Support at the first retracement of the rise up to mid-July’s highs from the lows of September 2022 still looks important for this market. It comes in at 1.24874. Retail trade data finds market participants quite evenly split on GBP/USD’s prospects, albeit with a small bullish bias. This may suggest that risk appetite is ruling trade at the moment, rather than bald interest-rate expectations.Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances.
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