BOEs chief economist Pill is on the wires saying:
- UK inflation remains too high
- UK rate policy does remain restrictive
- Sees more signs of slowing activity
- Higher UK rates are hitting the supply side
- BOE is still working to bring inflation down to 2%
- We are going to see UK inflation for 2 more comparable levels with the rest of the world in pretty short order
- We can’t make promises about monetary policy outlook
- We need to retain agility on monetary policy.
- We still do not know economic implications of conflict in middle east
- Causing demand constraint can be painful, but it is crucial to we get inflation back to target.
- MPC feels it needs to keep rates restrictive at least for a while
- It is premature to talk about cutting rates
- Middle of next year does not seem totally unreasonable for considering rate stands.
- As things change over those 9 months, we might need to reconsider monetary policy stance.
- If we have restrictive policy for too long, we risk creating recession and pushing inflation below target.
- Equilibrium interest rate is still probably positive.
- Interest rates in the future will probably be higher than in the pre-Covid era.
Looking at the GBPUSD on the 4-hour chart below,the high price for the day got within 7 pips of the 200 day MA at 1.2434. However, on the downside after hitting the high, the support near 1.23684 held (the low reach 1.2370).
Buyers and sellers are using the 1.2368 as support and the 200-day moving average 1.2434 as resistance.
This article was written by Greg Michalowski at www.forexlive.com. Source