A Bank of England survey of market participants indicated yields on 10-year gilts at 3.5% at the end of June 2023 and 3% at the end of December 2023:
- UK CPI inflation is projected to reach 8.3% in six months, 5.5% in December 2023, 3% in December 2024 and 2% in December 2025. It will take almost three years to bring it to target;
- Survey estimates £76 billion of winding down the QE program between November 2022 and September 2023, and £80 billion between September 2023 and September 2024;
- The survey gave a 29.8% chance of a bank rate cut over the next year. It indicates that the bank rate will peak in March 2023. According to the Bank of England's survey of market participants, the median projection for the peak bank rate is 4.25%.
- Respondents in the survey expect a gradual, slight strengthening of the British pound against the euro, despite an increasingly hawkish ECB. According to survey responses, the EURGBP exchange rate will reach 0.88 in December 2023 with a 75% probability against 0.872 currently. Far fewer respondents favored a weakening of the pound against the European currency.
GBPUSD has fallen below the 100-session moving average (black band) from where it is possible that bears will want to test the reversal of the uptrend after several months of solid gains on the 'cable'. The main support runs around 1.19, where the 200-session average (red band) is located.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.