FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that at their July meeting, the BoE will confront the same opposing forces that have persisted throughout the last few months.

Key Quotes

"At their July meeting, the BoE will confront the same opposing forces that have persisted throughout the last few months: strong growth, and weaker-than-expected inflation. As evidenced by the June PMIs near-term growth indicators remain firm, consistent with a continuation - or indeed a moderate strengthening - of the circa 3% annualised GDP growth experienced since last spring, in line with the BoE's May forecasts."

"Alongside that, labour market volumes have remained incredibly strong: the recent pace of employment growth was the fastest in at least 40 years (equivalent to US non-farm payrolls of around 500k), pulling the unemployment rate down from 7.2% to 6.6% in the past three months. With average hours and the participation rate also rising, all three indicators the BoE uses to assess slack in the labour market have tightened of late”.

"All else equal, that would warrant a tighter outlook for monetary policy. In addition to that, capacity utilisation indicators suggest that productivity is close to equilibrium."

Related Articles
  1. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  2. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  3. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  4. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  5. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  6. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  7. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  8. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
  9. Investing Basics

    The Risks Of Buying Bitcoin

    Virtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
  10. Forex News

    How The Forex "Fix" May Be Rigged

    When it comes to forex, some types of "fixes" are legal. But some really aren't.
  1. No results found.

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!