GBP/USD has advanced
sharply today (November 13th), following the publication of the latest
Inflation Report from the Bank of England (BoE).
Governor Mark Carney stated in August that
the bank will keep interest rates at record-low levels until unemployment in
the country falls to or below seven percent. Official data from the Office for
National Statistics (ONS) earlier in the day showed this figure inched lower to
7.6 percent in the three months to September.
At the time, Mr Carney said the bank expected
this threshold to be reached in the second quarter of 2016. This forward
guidance was introduced in an effort to reassure businesses that borrowing
costs will not be lifted in the near future, potentially encouraging them to
increase investment.
However, today's Inflation Report sees the
BoE up its growth forecasts and policymakers now expect the seven percent
unemployment target to be achieved in the third quarter of 2015.
In addition, the bank predicts
quarter-on-quarter GDP growth will reach 0.9 percent in the final three months
of the year, up from 0.8 percent in Q3.
The UK's inflation rate is also expected to
drop to the BoE's two percent target in early 2015 - six months earlier than
previously anticipated. According to the ONS, the figure fell to 2.2 percent in
October. This is down from 2.7 percent in the previous month and defied
expectations for a result of 2.5 percent.
Speaking after the publication of the
Inflation Report, Mr Carney said: "For the first time in a long time, you
don't have to be an optimist to see the glass is half full. The recovery has
finally taken hold."
The BoE governor also clarified that reaching
the unemployment target will not be an automatic trigger for interest rates to
be lifted, but that such a move will be considered at this time.
As of 13:20 GMT, GBP/USD was
trading 0.45 percent higher for the session at 1.5976. -
Source:fx360.com
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