The BoE is worried about long-term inflation | 07 Tháng sáu 2023

07 Tháng sáu 2023, GBP/USD

The BoE is worried about long-term inflation

GBPUSD trading plan:

The BoE is trying to curb an inflation rate that is running higher in Britain than in the United States and the euro zone, without pushing the economy into a recession after having already increased borrowing costs 12 times since late 2021. The BoE is expected to raise rates again, to 4.75% from 4.5%, on June 22 after inflation slowed by less than it hoped in April. Traders see a roughly 70% chance that Bank Rate will climb to 5.5% later this year. More worrying for the BoE, two measures of underlying price growth - core inflation, which excludes energy, food and tobacco prices, and price increases in the services sector - both hit their highest rates since 1992. The BoE is worried about long-term inflation heat from the labour market where a shortage of workers, caused by a rise in the number of long-term sick after the COVID-19 pandemic, has been compounded by new Brexit rules on European Union workers.

Investment idea: buy 1.2395 and take profit 1.2479.

David Johnson
Analyst of «FreshForex» company
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