Following its March policy meeting, the Bank of England (BOE) announced that it raised the policy rate by 25 basis points (bps) to 4.25% as expected. Two policymakers, Tenreyro and Dhingra, vote to keep the policy rate on hold at 4%.
"If there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required," the BOE said in its policy statement.
Follow our live coverage of the BOE policy announcements and the market reaction.
Market reaction
GBP/USD is struggling to make a decisive move in either direction following the BOE's policy announcements. As of writing, the pair was trading modestly higher on the day at around 1.2300.
Key takeaways from the policy statement
"Staff forecast Q2 GDP to increase slightly (Feb forecast: -0.4%), Q1 GDP forecast unchanged at -0.1%."
"Q2 CPI likely to be lower than forecast in Feb, due to longer energy price cap and lower wholesale prices."
"CPI remains likely to fall sharply over remainder of 2023, despite upward surprise in Feb."
"Surprising strength in Feb core goods prices reflects volatile clothing prices, may not be persistent."
"UK banking system is well-placed to support economy, including in a period of higher interest rates."
"UK banking system maintains robust capital and liquidity, remains resilient."
"Will continue to monitor UK credit conditions closely."
"Fiscal support in March budget to increase GDP level by around 0.3% over coming years."
"Extended energy price guarantee to lower Q2 CPI by around 1 percentage point vs Feb forecast, other measures to lower CPI by around 0.33 percentage points."
"Wage growth likely to fall back somewhat faster than forecast in Feb due to lower inflation expectations."
"Staff expect 0.2% Q2 employment growth (Feb forecast: -0.4%), no rise in unemployment."
"Businesses see year-ahead inflation of 5.6% in 3 months to Feb vs 6.2% in 3 months to Nov."
"Businesses see year-ahead wage growth of 5.7% in Feb vs 5.8% in Nov."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.