Wise Money eyes on the BOE and the ECB today.
The Pound took a further bashing yesterday now reaching an 11 week low against the dollar.
Sterling came under severe pressure after the UK Industrial Production figures were much worse then anticipated, with a 0.5% fall month on month. The continued weak data for sterling has raised discussions that the BOE will be forced to cut rates by a further 25bp at the meeting today.
However with UK inflation data due to be released next week many economists believe the BOE will hold rates until this data is revealed. The inflation data is expected to hit 3% so it may be seen as irresponsible for the BOE to cut rates before this important data is released.
This 3% level is extremely significant because the MPC will have to write letter of explanation to the treasury explaining why inflation is so high.
A panel of 9 financial and economic experts which make up The Times Shadow MPC also recommend that the sterling base rate remains on hold at the meeting today. The votes were swayed 5 to hold and 4 to cut.
The retail sales in the euro zone were released yesterday morning, highlighting the worsening European economic performance we have seen over the last few weeks.
The retail sales fell by 0.4% in March similarly placing pressure on the ECB who are meeting today as well.
However the ECB who are also faced with similar pressures of rising inflation and slowing growth are also expected to keep rates on hold. What will be of more interest to the market will be the comments of Trichet in his press conference following the rate announcement where he is expected to emphasise the downside risks to the economy.
The dollar on the other hand has been heading towards recent highs against a basket of currencies. Fed officials have hinted that the hard-line rate cutting may be lapsing with US Treasury Secretary Henry Paulson stating in a recent Wall Street Journal interview that 'the worst seems to be behind us.'
The BOE are due to make the rate announcement at 12.00 today followed by the ECB at 12.45. Further to this data out today is the US initial jobless claims out at 13.30.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Sterling came under severe pressure after the UK Industrial Production figures were much worse then anticipated, with a 0.5% fall month on month. The continued weak data for sterling has raised discussions that the BOE will be forced to cut rates by a further 25bp at the meeting today.
However with UK inflation data due to be released next week many economists believe the BOE will hold rates until this data is revealed. The inflation data is expected to hit 3% so it may be seen as irresponsible for the BOE to cut rates before this important data is released.
This 3% level is extremely significant because the MPC will have to write letter of explanation to the treasury explaining why inflation is so high.
A panel of 9 financial and economic experts which make up The Times Shadow MPC also recommend that the sterling base rate remains on hold at the meeting today. The votes were swayed 5 to hold and 4 to cut.
The retail sales in the euro zone were released yesterday morning, highlighting the worsening European economic performance we have seen over the last few weeks.
The retail sales fell by 0.4% in March similarly placing pressure on the ECB who are meeting today as well.
However the ECB who are also faced with similar pressures of rising inflation and slowing growth are also expected to keep rates on hold. What will be of more interest to the market will be the comments of Trichet in his press conference following the rate announcement where he is expected to emphasise the downside risks to the economy.
The dollar on the other hand has been heading towards recent highs against a basket of currencies. Fed officials have hinted that the hard-line rate cutting may be lapsing with US Treasury Secretary Henry Paulson stating in a recent Wall Street Journal interview that 'the worst seems to be behind us.'
The BOE are due to make the rate announcement at 12.00 today followed by the ECB at 12.45. Further to this data out today is the US initial jobless claims out at 13.30.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: Bank of England, ECB, inflation, interest rates, Weak Sterling, wise money
posted by Wise Money @ 2:01 PM
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