Please disable Ad Blocker before you can visit the website !!!


by SignalFactory   ·  December 16, 2021 | 13:19:36 UTC  


by SignalFactory   ·  December 16, 2021 | 13:19:36 UTC  

The Bank of England on Thursday hiked interest rates for the first time since the onset of the pandemic, increasing its main interest rate to 0.25% from its historic low of 0.1% as inflation pressures mount.

U.K. inflation hit a 10-year high in November as the Consumer Price Index rose by an annual 5.1%, up from 4.2% in October and well above the central bank’s target of 2%. The Bank now expects inflation to remain at around 5% through the majority of the winter period, peaking at around 6% in April 2022%.

Meanwhile, the labor market recovery has remained robust, with 257,000 staff added to payrolls in November, even after the end of the country’s furlough scheme.

After the Bank surprised markets by avoiding a rate hike in November, many analysts had suggested that the subsequent data showed the economic conditions were in place to start tightening.

However, most economists polled by Reuters expected the Bank Rate to be held at 0.1% going into Thursday’s meeting, in light of the emergence of the omicron variant and its rapid spread in the U.K.

At its November meeting, the MPC suggested that if incoming data, particularly on the labor market, were broadly in line with its central projection, a hike would be needed to return inflation toward its 2% target.

The Bank’s nine-member Monetary Policy Committee voted 8-1 in favor of the 15 basis point hike while voting unanimously to maintain the government bond-buying program at its target stock of £875 billion ($1.16 trillion), along with £20 billion of corporate bonds.

The International Monetary Fund on Tuesday had urged British policymakers to avoid “inaction bias” ahead of the vote.

The BOE also revised down its expectations for U.K. GDP at the end of the fourth quarter of 2021 by around 0.5% since the November report, leaving the economy around 1.5% off its pre-Covid level.

“The impact of the Omicron variant, associated additional measures introduced by the UK Government and Devolved Administrations, and voluntary social distancing will push down on GDP in December and 2022 Q1,” the Bank said in its report.

“The experience since March 2020 suggests that successive waves of Covid appear to have had less impact on GDP, although there is uncertainty around the extent to which that will prove to be the case on this occasion.”

A ‘catch-22’ and a Christmas surprise:
Hussain Mehdi, macro and investment strategist at HSBC Asset Management, said the 8-1 vote to hike rates was “fairly surprising” given the emergence of omicron and uncertainty over its near-term growth impact.

“Nevertheless, there were solid reasons for immediate action. The labor market is tight, and Omicron has the potential to exacerbate supply-side constraints in goods and labor,” Mehdi said, indicating further inflationary pressures.

“Ongoing upside inflation risks are likely to push the MPC into further action in 2022.”

GBP/USD Long (Buy)
Enter At: 1.3369
T.P_1: 1.3455
T.P_2: 1.3510
S.L: 1.3282

All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user. This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use. Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered. While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all. All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information. All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way. The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions. Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company. Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results. Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.

Signal Factory is now on Telegram

make sure to join our Telegram channel now and you will not miss any update