BoE’s Pill: Gas price increase is a big shock for the UK economy

Dhwani Mehta FXStreet

Bank of England (BoE) Chief Economist Huw Pill is speaking at a panel discussion at the UBS European Conference titled "Global monetary policy challenges," in London.

Key quotes

Gas price increase is a big shock for the UK economy.

Danger of self-fulfilling dynamics in wage-cost nexus.

We cannot declare victory against second round effects, but we are entering recession.

We have tried to re-anchor expectations, give more realistic view of where bank rate is heading.

There is more to do, we need to raise rates to tighten monetary policy.

We are not going to be moving at a pre-defined pace at every meeting.

At some point, we need to think about broader economic outlook.

Should not put housing market on a pedestal as an economic driver.

Market reaction

GBPUSD is reversing from daily lows of 1.1444 on Pill’s remarks, currently trading at 1.1458, but still down 0.47% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD continues to target 1.2000

EUR/USD builds on Monday’s optimism, edging closer to the key 1.2000 area while hitting tops last seen back in June 2021. The latest push higher reflects ongoing selling pressure on the US Dollar, with the broader risk environment still supportive and investors once again turning their attention to tariff-related risks emerging from the White House.

GBP/USD loses some momentum ahead of1.3800

GBP/USD continues to grind higher on Tuesday, climbing toward the 1.3800 handle and setting fresh multi-month highs as broad-based US Dollar weakness remains the dominant theme prior to Wednesday’s FOMC event.

Gold record-setting rally extends ahead of Fed decision

Gold is continuing its record-printing spree early Wednesday, testing offers above the $5,200 level for the first time. Buyers refuse to pause heading into the US Federal Reserve policy announcements, due later in the day.

Bitcoin, Ethereum and Ripple extend recovery after retesting key supports

Bitcoin, Ethereum, and Ripple are extending their recovery so far this week after a massive correction last week. BTC trades above $89,000, ETH above $3,000 and XRP above $1.90.

Four problems of the US Dollar

The US Dollar Index returned to last year's lower bound, which we had not seen since 2022. The drivers are investment portfolio diversification, concerns about the US economic growth slowdown, rumours of FX interventions and active selling by carry-traders.

XRP price struggles below $2.00 despite steady ETF demand

Ripple (XRP) is trading around $1.88 at the time of writing on Tuesday, correcting from the previous day’s high of $1.95. The cross-border remittance token remains under immense pressure amid a weak technical structure.