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π¬π§ London in search of positive: pound again not blessed with prime minister
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π± Analysts are trying to convince us that UK economy is growing, although inflation is too high due to rising wages. A CBI Industrial Trends report showed that both UK consumption and manufacturing are suffering from weaker demand due to labour shortages. GDP data for the third quarter turned out to be slightly worse than forecast, but at end of year everything looks good: the market was expecting a slowdown in economic growth to 6.6%, but in fact, it turned out to be 6.8%.
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EU and Britain have reached an interim agreement on the Northern Ireland
Brexit Protocol, but negotiations will continue next year. It is already obvious that due to pressure from the Biden administration, Johnson is gradually retreating, and this can be considered a positive for pound. There was also no chance of a renegotiation of the bilateral agreement with Washington that would be beneficial for Britain.
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At the last meeting, BOE managed to surprise the markets and immediately raised the rate by 0.15% β up to the same indicator of Fed (0.25%), but one can not count on further tightening of monetary policy.
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Consumer sentiment is deteriorating as high inflation depresses economy and new COVID strains threaten with Β«freshΒ» quarantines. Although Omicron is considered less lethal, Britain has updated its anti-daily record for infections. The government is preparing a new plan to tighten social isolation measures for another two weeks, information about this will become a negative factor next week. Of the positive New Year's Eve promises, it is worth highlighting the idea of supporting the national leisure industry: Minister of Finance has promised companies in the hotel and entertainment sector will receive a one-time subsidy of Β£6,000.
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The Tory party lost a key election to Labor in North Shropshire β a situation that has intensified the theme of Johnson's resignation. New political Β«discussionsΒ» in the short term will be a negative factor for the pound.
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Now GBP/USD has risen to the upper end of the range, which it has been since the beginning of December, but this is the usual correction. The pound has almost no prospects for confident growth.
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Profits to yβall!