A1 Trading Company

November 3, 2021

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

Theo Ashley-Hacker

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.

A1 Edgefinder

AI- Generated Trading Setups
AI-generated bullish/bearish bias setups on forex currencies, gold, & indices.

Discount code: 'READER'

Access Now

Free

Trading Plan Template
Struggling to build a successful trading plan? Download our template to get started today!
Download
Expecting A Pullback

Today's economic figures came out in US and Canada. GDP came in higher than expected in Canada while the price of goods purchased by consumers was lower than last month. Here are some pullback ideas for USD and CAD from GDP and PCE numbers. EdgeFinder Analysis NAS100 is a bullish reading on the EdgeFinder still. […]

Read More
Traders Wait For More Inflation Data

This week has brought more inflation data with it regarding the USD's PCE and PMI numbers. Powell is also set to speak this Friday about monetary policy going forward. The RBNZ will also release their latest interest rate news tomorrow with expectations of an unchanged rate at 5.5%. EdgeFinder Analysis GBPUSD is a bullish bias […]

Read More
Trading Into PMI Data on EUR, GBP and USD

This week is a big PMI week for Europe, UK and US. Additional inflationary metrics will add to the overall sentiment of these countries' monetary policies going forward. Here are some setups for the coming week on these currencies. EdgeFinder Analysis GBPCAD is now a +7 on the EdgeFinder as we wait for CPI news […]

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
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonecrossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram