Governor Bailey Growth Warning
The governor of the Bank of England (BoE) expects "growth and demand to slow" due to the shock from energy prices this year, which "will be larger than any single year in the 1970s", as per his Bruguel speech on Monday. 
The BoE had delivered its third rate hike in a row earlier in the month in the face of surging inflation, with last week's data showing a 6.2% year-over-year jump in February's CPI.
The decision however was seen as dovish, since the bank changed its guidance . It said that further modest tightening in monetary policy "may be appropriate" in the coming months, from February's more hawkish "is likely to be appropriate" reference.
Mr Bailey commented yesterday that this change in language "is a reflection of the level of the level of uncertainty and the risks we face".
Mr Bailey's comments and US Dollar strength weighed on the pair yesterday, leading to a roughly 100-pips slump, but today it tries to find support. This may give it the opportunity to retake 1.3159-64, but we remain cautious about its prospects of bigger rebound towards and beyond 1.3270-1.3300.
This area contains the 200EMA and the 38.2% Fibonacci of the drop form this year's high's to the lows, which the British Pound had rejected last week. As such, bears retain control and can push back towards 1.2999-80, but it may still be early for a larger decline that would threaten 1.2829.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 04 Oct 2022 https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/march-2022