BREAKING: GBP strengthens after BOE rate decision

The Bank of England decided to take a wait-and-see approach during its August monetary policy meeting and left its benchmark interest rate unchanged at a record low of 0.1% and the bond-buying programme at £875 billion as widely expected.

The central bank reiterated that it does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably. Some policymakers judge that, although considerable progress has been made in achieving the conditions of that guidance, the conditions are not yet met fully. The other members judge that the conditions of the guidance have been met fully, but note that the guidance made clear that these have only ever been necessary, not sufficient conditions for any future tightening in monetary policy.

Highlights:

• UK GDP expected to have risen by 5% in Q2
• UK GP expected to grow by around 3% in Q3
• UK GDP will reach pre-pandemic levels in Q4 2021
• Strength in global inflationary pressures expected to be transitory
• Inflation projected to fall back to close to the 2% target

GBPUSD  - Initially currency pair fell after however buyers manage to quickly regain control and price is testing  the upper limit of the descending channel. Source: xStation5