According to Capital Economics, after the Bank of England’s bond purchase program is over in November, the central bank will proceed to further quantitative easing steps. The following supposition is confirmed by the BOE’s revised GDP and inflation forecasts.
The previous forecast anticipated a 1.3% increase in the British GP this year. However, later on, the forecast was reduced to 0%. However, Capital Economics draws our attention to the fact that the revised forecast do not take into account the impact of the eurozone crisis. They also expect the rate of inflation to reach the 2% limit earlier than expected. Within 2 year the rate of inflation will exceed the limit.
Therefore, the experts assume that the BOE is still determined to take further QE steps if necessary. The central bank will continue easing its monetary policy in November through interest rate cuts and more substantial bond purchases.
Forex.
According to , GBPUSD continues rallying in the form of wave А/В of Н8.
A further rally will probably encounter resistance around 1.5702, 1.5729 and 1.5766. The current bullish move will be completed as soon as the price overcomes the bottom of the MF sloping channel and consolidates below 1.5572 (as shown below).
