On Tuesday afternoon, the GBP/USD pair is trading under pressure; the market is analyzing the British regulator’s comments.
The British Pound is falling against the USD on Tuesday. The current quote for the instrument is 1.2664.
When delivering his speech in the Mansion-house, the Governor of the Bank of England, Mark Carney, said that the time to increase the interest rate didn’t come yet. Key reasons that slow down the process are the slow growth of salaries in the country and discomfort on the threshold of the Brexit.
The BoE wants to see if the country’s economy can neutralize the decline in consumer demand by other sources of consumer interests and the way the labor expense sector is going to respond to this. Moreover, no one has calculated yet the reaction of capital markets to possible tightening of the regulator’s monetary policy and how the Brexit procedure may influence the economy.
On top of that, one shouldn’t underestimate the inflationary pressure. After the crisis of 2008-2009, the Bank of England tried to boost the CPI, and a bit later did its best to slow it down. Some member of the BoE believe that inflation is the thing that may complicate the economic situation in case the interest rate is left unchanged.
The Pound weakened significantly after these comments; such tendency may continue at least until the end of today’s trading session.
RoboForex Analytical Department