Mark Carney has defended his decision to intervene following the Brexit vote. Are further gains for Sterling likely? This morning's consumer price release could provide further strength for the Pound.
Bank of England governor Mark Carney has recently spoken out claiming that the central bank’s decision to intervene with monetary policy following the Brexit vote helped to stabilise the British economy. He said that the Bank’s decisions have been validated and last week we saw Sterling Euro rates hit their best level to buy Euros since early August. UK inflation is due to be published in the morning in the form of the Consumer Price Index with expectations for 0.7% year on year.
With the change in exchange rates and the impact of the Brexit this is likely to keep inflation relatively high which is different to what is happening on the continent.
This could possibly see some gains for the Pound following the announcement so it may be worth keeping a close eye on the data release if you have a currency transfer to arrange.
The Bank of England are due to meet on Thursday and with interest rates currently at their lowest level in history I would be surprised to see any change to the current policy. The BoE governor Mark Carney has been rather positive in recent weeks and I think any reassurance by him that the British economy is doing well could see Sterling improve against all major currencies.
Prior to the interest rate decision comes UK Retail Sales and last month we saw this come out extremely positively and another positive announcement could see Sterling go in an upwards direction. Last month’s figures came in at 5.4% so although I wouldn’t expect such a big improvement from the month before I would expect to see another strong month on the British high street and this could potentially help Sterling exchange rates rise against both the Euro and the US Dollar.
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