The EUR/GBP is gaining traction, influenced by central bank policies and economic data. While the BoE contemplates a rate hike, the UK’s CPI comes in lower than expected. The BoE’s next move and upcoming economic data will heavily influence the pair. Technical analysis suggests a bullish trend, with potential resistance at 0.8700.
The most recent data shows that inflation in the UK has fallen to 5%, which is a significant improvement from the peak of 10% seen earlier this year. While this is undoubtedly positive news, it is important to note that the current inflation rate is still five times the Bank of England’s target of 2%. However, the fact that we have likely passed the point of maximum inflation is an encouraging sign that the UK economy is on the road to recovery.
Bloom’s speech highlighted the frustration and anger that many people feel towards the banking system and the way it has been handled in recent years. While some may agree with his views, others may disagree and argue that the bailout of banks was necessary to prevent a complete collapse of the financial system. Regardless of one’s perspective, it is clear that the issue of the banking system and its regulation remains a contentious and complex issue.
The U.K. recorded a steeper second-quarter contraction than any other rich country, a performance that means it suffered the worst economic hit from coronavirus in Europe as well as reporting the highest death toll.
The Bank of England’s new economic forecasts are “certainly on the more positive side of consensus,” Nomura economist George Buckley says. He adds that policymakers have “little appetite” for negative interest rates, despite providing analysis on this possibility alongside Thursday’s decision to maintain current policy.
The U.S. jobs report for July caps a full week of data that should shed light on the global pace of recovery from a sharp, severe recession caused by responses to the new coronavirus. US COVID-19 cases have topped 4.6 million yet the infections curve is showing signs of declining. On the other hand, mortalities have surpassed 155,000 and are on the rise. The increase since mid-June has already caused economic damage that the Federal Reserve acknowledged.