The BOE shakes things up, bumping up rates by a 25bps!
Prepare as the financial world eagerly awaits the impact of this move. Keep a close eye as it could have far-reaching implications for markets and traders alike.
The BoE recently raised interest rates by 0.25 basis points but cautioned that if inflation continues to rise, further tightening may be necessary. Interestingly, two members of the MPC voted against the rate hike.
The Central Bank predicts a dip in wage growth, which could mean good news for inflation. Business owners’ forecast for inflation rates is looking a little sunnier, with a potential dip to 5.6% in February 2023.
The Bank of England is keeping a close eye on this trend and will tighten their monetary policies if necessary.
Stay tuned for the latest updates on the Flash Manufacturing PMI releases!
The banking sector has been in turmoil but, the Bank of England says the UK banking system is still going strong. Despite the fallout, the system boasts robust capital and liquidity, which has helped to keep it resilient.
The Monetary Policy Committee (MPC) is keeping a watchful eye on the situation, and is monitoring its effects on credit conditions for households and businesses.
But there’s a silver lining: the support measures announced in the spring budget could lead to an increase in GDP by about 0.3% over the next few years.
Of course, the impact on supply and demand will be taken into consideration before the May Monetary Policy Report.
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UK Inflation Data
The Bank of England is feeling the heat as UK inflation data shows a sticky situation in the hospitality sector. However, there is a glimmer of hope with the Bank’s Decision Maker Panel survey pointing to less aggressive price and wage rises in the future.
Even better news comes with the official wage data that appears to be gradually easing. The Decision Maker Panel data released yesterday confirms a downward trend in inflation estimates, with a 5.6% peak forecasted for 2023.
While these positive developments are encouraging, the hospitality sector must keep prices in check to prevent inflation from soaring.
The GBPUSD saw a bit of a boost, increasing by 40 pips, before settling around 1.23. Despite this minor pullback, the bigger picture suggests that the pound has a strong advantage, with analysts predicting that it may even test the yearly high of 1.2500!
You can keep an eye on key resistance levels including 1.2400, 1.2500 (the psychological level), and 1.2620. Meanwhile, support levels such as 1.2200, 1.2145 (50-day MA), and 1.2075 (100-day MA) are also critical to monitor.
As long as the GBPUSD maintains a bullish trend above 1.2050, it continues to look like a promising investment opportunity. However, it’s important to note that a daily candle close below this handle could invalidate this viewpoint.
Expected Today: PMI Releases
Today on March 24, 2023, five Flash Manufacturing PMI releases will drop, giving us insight into the health of the manufacturing sector. These releases include German, French, and two EURO-denominated PMIs, as well as a GBP-denominated PMI.
But why should you care?
Well, for starters, traders will eagerly anticipate a higher actual result than forecast, which could potentially boost the currency. Moreover, investors have a lot to gain from these PMIs because they provide valuable information about businesses’ responses to market conditions.
Think of it as a glimpse into economic health. Plus, purchasing managers the people closest to the day-to-day operations of manufacturing businesses have the most up-to-date and relevant insights into how these businesses view the economy.
Also, get ready for the latest flash services PMI releases from Markit! This metric is like a crystal ball, estimating the level of a diffusion index by polling purchasing managers in the services sector.
With surveys covering Germany, France, and both the euro and US markets, you won’t want to miss out on this economic forecast.
Remember, a score above 50.0 means that the industry is expanding, while anything below suggests contraction. This is crucial for investors, as it serves as a leading indicator of economic health.
Businesses respond quickly to market conditions, so these PMI reports give valuable insights into the current state of affairs.
If you’re looking for the most up-to-date and critical economic outlook, tune in to these flash services PMI releases from Markit.
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