(MENAFN– ecpulse) style="font-size: small;"> Following the ECB rate decision last week, eyes will focus on the BOE as it announces its monetary decision for July.
style="text-align: justify;"> style="font-size: small;"> The Bank of England decided to hold its monetary stance last amid signs of remarkable improvement in the British economy.
style="text-align: justify;"> style="font-size: small;"> This week, the BOE will probably keep its monetary stance by holding both interest rate at 0.50 percent and the amount of asset purchases at 375 billion pounds.
style="text-align: justify;"> style="font-size: small;"> The recent data has signaled recovery is moving on the right track, raising expectations the U.K. would be among the first developed nations to fully recover from the repercussions of the financial crisis.
style="text-align: justify;"> style="font-size: small;"> Recent data showed that U.K. manufacturing sector winded expansion at its fastest rate in seven months to 57.5 last month from a prior of 57.0, according to the PMI, while the services sector dropped to a three-month low of 57.7 in June from the highest level this year recorded in May.
style="text-align: justify;"> style="font-size: small;"> Britain grew a robust 0.8 percent in the first three months of this year, after expanding 0.7 percent in the previous three months, where the BOE expects 0.9 percent expansion in the second quarter.
style="text-align: justify;"> style="font-size: small;"> The labor market has also witnessed improvement as unemployment rate retreated to 6.6 percent from 6.8 percent, where the number of job seekers bucked by 1361,000 to 2.16 million.
style="text-align: justify;"> style="font-size: small;"> Regarding inflation, U.K. CPI for the year ended May retreated to 1.5% from 1.8% in March.
style="text-align: justify;"> style="font-size: small;"> Despite the remarkable improvement in the economy, BOE Governor Mark Carney said the bank is unlikely to raise interest rates to normal levels, much above 2.5% over the course of the central bank`s forecast period, which ends in early 2017.
style="text-align: justify;"> style="font-size: small;"> The BOE Governor has eased his tone as he mentioned previously "the relatively low probability attached to a Bank Rate increase this year implied by some financial market prices was somewhat surprising."
style="text-align: justify;"> style="font-size: small;"> The economy could maintain its pace of growth and slack “would be absorbed more quickly than had previously been expected,” the BOE said last month.
style="text-align: justify;"> style="font-size: small;"> Carney mentioned the economy is still facing some challenges as he sees household debt high and expects exports to weaken due to the shaky situation in the euro area and the sterling’s appreciation.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.