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McCafferty doubts rate hike will happen before elections

Thursday, Feb 19 2015

Sterling is still higher after yesterday's BoE Meeting Minutes and better than forecasted UK job figures.Though BoE Meeting Minutes showed that interest rate hike could happen sooner than expected BoE member McCafferty doubts that this will happen before the election, scheduled for May. In his opinion it is better to hold rates constant for a longer time, but he confirmed that all BoE members agree next move in rates is likely to be upwards.

The reason why we cannot expect rate hike in the next few months lies behind the falling inflation. He also noted that any rises will be limited and gradual. Also, falling oil prices should not have any larger fiscal impact on UK government. When addressing global concerns, primarily Greek bailout question he said that UK bank exposure to Greece is limited.

 

Despite recent uptrend in Sterling, with no interest rate hike in near future we believe that any gains in GBP/USD pair, for the moment, will be limited by 1.55 handle, where we would look for any type of resistive candles in order to start selling the market.

More in this category: « French CPI fell by 1.0% in January Eurozone Current Account recorded surplus of €17.8 billion »

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