GBP hits new highs. Overview for 11.07.2023
The British pound sterling is rallying against the US dollar. The current GBPUSD quote is 1.2884.
GBP received strong support from the Bank of England. Yesterday the governor of the BoE Andrew Bailey delivered a speech confirming that the regulator was determined to fight inflation till the end.
Bailey is influenced by policymakers and economists who think that the current surge in price activity is higher than it could be. The inflationary target is 2.00%. The CB states that with such a level of consumer prices the UK could enjoy price stability, and its economy could flourish.
The interest rate of the Bank of England has been growing at each of the last 13 meetings. Market expectations show that most probably the rate will rise to 5.25% per annum at the nearest meeting as well. Long-term forecasts do not exclude that the interest rate might reach the range of 6.25-6.50% by the beginning of 2024. This will be the high of the last 25 years.
Such a tight stance of the Bank of England is what facilitates the purchasing activity in the pound.
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