In the United Kingdom, the Bank of England today opted to keep interest rates unchanged, whilst warning that inflation figures could be set to climb higher.

The BOE chose to keep rates at a record low of 0.1%, while also unanimously  voting to maintain its asset purchasing  programme unchanged at £895 billion.

In a statement following the decision, the MPC stated that, “Overall, Bank staff now expect inflation to rise materially further in the near term, temporarily reaching 4% in 2021 Q4 and 2022 Q1, 1½ percentage points higher than in the May projection”.

It is also expected that GDP in the UK will show growth of 5% for the second quarter of the year, as the economy reopened post COVID-19 restrictions.

GBPUSD rallied to an intraday high of 1.3949 on the news.

 

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