Pound pending decision of the Bank of England

Yesterday British currency tried to continue its growth in the pair GBP/USD, but as a result, biddings ended almost without unchanged. Today will be not many news from the UK, so the movement of the pound may be limited, but tomorrow sterling is expect a high volatility.

The meeting of the Bank of England carries a great intrigue. At the last meeting, three members spoke for tightening monetary policy. Later, another official supported this idea. Mark Carney also changed his rhetoric to a more hawkish, declaring his readiness to change monetary policy, if it will be necessary.

Usually low exchange rate of the national currency leads to an increase of inflation and level of 2.9% really could force the Bank of England to take action, but the latest decline of the consumer price index to 2.6% allows officials to not rush with tightening. Besides that, overall situation in the economy does not contribute to the active actions from the central bank.

GDP is growing very slow, which is a deterrent for the Bank of England. But the most important factor of uncertainty remains the process of withdrawal of the United Kingdom from the European Union. Brexit can very quickly cause major changes in the UK economy, which force the Bank of England be cautious when making decisions.

Therefore, is more likely the policy of the British regulator will not change tomorrow, and the position of Mark Carney and his forecasts will determine the direction of the pound.