Currency Analyst since 2010

GBP bounces on BoE Inflation Report

GBP/USD jumped from levels in the $1.5890 area to $1.6000.

UK unemployment rate declined from 7.7% to 7.6%, and the number of people claiming unemployment-related benefits fell more than the economists had projected.

The Bank of England also released the Inflation Report. According to the BoE, British CPI may tick up in coming months as utility price hikes take effect. GDP growth forecast for 2013 was raised from 1.4% to 1.6% and for 2014 – from 2.6% to 2.8%. The interest rates won’t be increased as long as unemployment rate is above 7%. Governor Carney sees 47% chance of unemployment hitting target by the end of 2014, 57% – by the end of 2015, 68% – by the end of 2016.

Chart. H1 GBP/USD


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