The Bank of England kept policy on hold yesterday as widely expected, although they cut their inflation forecasts for this year and next, whilst raising their growth forecasts.
The Bank indicated at least one-to-two quarter point rate increases would be needed over the next three years to keep inflation on target.
On the Brexit front, talks continue between the two main parties, with the prime minister hoping to bring her deal back for another vote in the coming weeks, in a bid to avoid the EU elections on May 23.
In the US, the central bank also kept policy on hold this week, with the committee maintaining a patient approach, and interest rates likely to remain unchanged over the coming year.
On the exchanges, sterling again saw some demand following the recent weakness.
GBP/USD found a base ahead of 1.2850 to rally back above the 1.3000 level, but conviction remains low. 1.3130 continues to be the initial topside target to watch.
GBP/EUR held the 1.1500 support as expected, however we expect 1.1800 to continue to hold the topside for now.
|10/5/19||UK GDP YoY||1.4%||1.8%|
|10/5/19||UK Manufacturing Prod. YoY||0.6%||1.3%|
|10/5/19||UK Industrial Prod. YoY||0.1%||0.5%|
|10/5/19||UK Construction Output SA YoY||3.3%||5.4%|
|10/5/19||UK Trade Balance||-£4860m||-£4600m|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2758||+9.01%|
UK Benchmark Rates
|3 month||0.81375%||2 year||1.06%|
|6 month||0.93488%||3 year||1.13%|
|12 month||1.09325%||5 year||1.23%|
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