The Pound hasn’t landed yet. Overview for 23.09.2022

The Pound sterling is plunging against the USD. The current quote for the instrument is 1.1158.

During its September meeting, the Bank of England raised the benchmark interest rate for the seventh consecutive time, by 50 basis points, to 2.25%. Such a hike was widely expected, but some investors believed it could have been more aggressive. According to the revised expectations of the BoE, the CPI might reach its peak at 11% in October. The regulator’s previous estimate was 13.3%. The regulator reports that inflation might remain above 10% for several months and then finally reverse downwards.

The price for energies guaranteed by the government will help to drive down prices and maintain demand. At the same time, this guarantee might reduce risks of pressure on domestic prices and salaries.

The Q3 GDP forecast implies a decline of 0.1% q/q against the previous estimate of +0.4% q/q. Overall, the Bank of England is still sticking to its conservative monetary approach.

However, it worked in most cases in the past, although it looked like a “wild card” at first.

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Source: RoboForex


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