Today, market participants focus on the news from the UK. The pound reached a 7-week low ahead of the Bank of England meeting. The Bank of England left the interest rate and the asset purchase program unchanged, which was in line with the expectations of the economists. Moreover, market analysts revised the previous economic forecasts. Thus, the UK GDP is expected to grow by 2% in 2017, Officials had forecast a 1.4% rise earlier in November. The market participants were disappointed by the revised inflation forecast. Monetary authorities expect a more gradual rise in consumer prices. After the announcement of the results of the Brexit referendum, the devaluation of the pound significantly accelerated the rate of inflation in the UK. Such sharp growth is forcing the Bank of England to change its monetary policy.
However, yesterday, traders noticed that the Bank of England put the interest rate decision on hold. BOE experts predict that the UK inflation rate will accelerate to a 2% target in the first quarter of 2017. By April 2018, price hike is expected to accelerate to 2.7%. As a result, the pound stopped its upward trend and returned to yesterday level of 1.2540.