The Bank of England held the official bank rate at 5.25%, with Catherine Mann and Jonathan Haskel being the only two hawks favouring a 25bps hike. This is more hawkish than expected as general thinking was that the three hawks that voted in December would relent. Moreover, the statement indicated that the central bank was still concerned over the persistence of inflation, with the forecast for inflation pushing back against expectations for an early rate cut. The statement read that "Monetary policy needs to be restrictive for an extended period of time until the risk of inflation becoming embedded above the 2% target dissipates."
GBPUSD did spike following the announcement but is still 0.21% down for the day with its daily RSI on the softer side of 50 (green rectangle).
The implied probability for a May cut is now 50%, down from just above 60%
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.