Ticker tape by TradingView

Want Trade Alerts?

See all of our entries, exits, and analysis. 
Use code READER for 25% OFF!
Join VIP

Bank of England MPC Meetings: Are interest rate rises inevitable?

On Thursday the Bank of England's Monetary Policy Committee will meet and vote on the official Bank rate among other policy measures. The Pound's interest rate has sat at 0.1% since the Coronavirus pandemic began in March of last year. However as the economy continues to recover and spending increases there are many factors that have changed since the MPC's last meeting in September that could point towards a change in the base rate.

Inflation and Consumer Prices

The latest release showed inflation has reached 3.1% in the year to September and is expected to increase further because of rising energy costs and high job vacancies resulting in higher wages that are getting passed on to consumers. The Bank of England have said they expect inflation to exceed 4% by the end of the year and its governor even said that they "will have to act" giving the biggest hint that the base rate will change yet.

Supply and Demand Influencing Factors

Last year the government spent more money than it had in any year since the second world war. However because of a lockdown and all non-essential shops being shut the majority of this money had not been spent by the people and companies receiving this money. Now the economy is fully opened up and as Christmas approaches, people are starting to spend at far higher rates.

Broadly, the UK’s current supply chain issues stem from global shortages of materials, staff shortages and transport delays occurring at the same time as sharp spikes in demand. Most factories and production plants have been closed or producing at a far slower rate over the last year so that asking them to suddenly to keep up with high levels of demand is near impossible.

Conclusion

Going into Thursdays meeting the committee members will be well aware that after this weeks meeting, the next chance they will get to hike interest rates will be in February. Its a common occurrence for price rises to accelerate around Christmas, more so this year with the chronic supply shortages. So by February it would be too late to try and limit these rises.

want trade alerts sent to you?

Join The VIP Community!

Our entries, exits, & analysis
Live webinar coaching calls
Trading chatrooms
Strategy library
Use Code "READER" for $5 OFF!
Join Now

Need a Better Broker?

Need Trading Help? (FREE!)

Can The New Variant Cause Another Market Crash?

12/2/2021 US equities fell 5% from the highs after fears of a new coronavirus variant emerged and the first case was recorded in the US. SPX500 is up .10% on the day at the time of writing this. Our outlook The new omicron variant is definitely concerning most investors right now as the US will […]

Read More
GBP/USD Deep Dive: Under Pressure?

Check out my previous G/U deep dive from early October here to see how we have progressed... Technical Outlook: Price has mainly been travelling in channels throughout the past year. As we saw the ascending channel formed post-Covid last year, price began retesting all previous key horizontal levels. Over the past couple of months, price has […]

Read More
What We Could Expect To See From Gold Today

11/30/2021 Gold price rose 0.59% on the day at the time of writing this in light of the uncertainty surrounding the Fed's policy towards the new variant and tapering of asset purchases. Our outlook I think gold will likely see some green today as the virus concerns can cause a slow in growth since the […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram