The Pound is waiting for the news. Overview for 05.05.2021

GBPUSD is trading without any particular trend in anticipation of the BoE meeting. 

The British Pound is consolidating against the USD while waiting for decisions and comments from the Bank of England. The current quote for the instrument is 1.3888.

The statistics published yesterday showed that the Mortgage Approvals in the United Kingdom was 83K March, which is worse than expected. It may well be that the reason for that was a strict lockdown and rather cold weather this spring. At the same time, the Net Lending to Individuals in March showed $11.3B against the expected reading of £5B.

Later today, the United Kingdom is scheduled to report on the Services PMI for April. 

On Thursday, the Bank of England will have its May meeting and is very likely to keep the benchmark interest rate intact at 0.1%. There were a lot of rumors on financial markets that the British regulator might change its conservative rhetoric and be more aggressive this time. This might be a signal that the BoE was ready to tighten its monetary policy.

There is no guarantee that the country’s economy is ready for tightening even considering the current amount of stimulus measures. It would be reasonable to assume that the UK regulator should start with cancelling the lockdown after beating the coronavirus and monitoring the current processes in the economy and start tightening its policy only after that. One should agree that the Bank of England has never been hasty as its moves have always been pretty balanced and cautious. If the BoE provides these signals this time, it will mean that the country’s economy is definitely ready.