GBP Rebound Could Reduce Inflation Overshoot

Sterling’s strong performance over the past month suggests inflation may overshoot the Bank of England’s target by less than it forecast in November, the central bank said on Thursday.

BoE policymakers agreed unanimously to keep interest rates on hold at a record low 0.25 percent and left plans for government and corporate bond purchases unchanged after their December policy meeting, as economists polled by Reuters had expected.

Last month Bank policymakers dropped their plan for another interest rate cut and instead adopted a neutral stance for policy, after Britain’s economy suffered much less immediate damage from June’s Brexit vote than early data had suggested.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.