The Bank of England has left its key interest rate at the record low level of 0,5%. Mervyn King, the BoE’s Governor, and 9 members of the MPC voted for it.
This interest rate decision coincides with the one of IMF, which recommends leaving this scale of the monetary and credit stimulation in order to help the country’s economic recovery even though the inflation rate is twice as high as the limit.
The British economy has been in stagnation for over 6 months: all the main economic indicators have show a slowdown in the economic recovery so far. The budget spending cuts (initiated by the Board of Exchequer as a part of the program of budget spending reduction) keep exerting extra pressure on the economic growth of GB, which will hardly exceed 0.3% this quarter. However the IMF approves these measures, pointing out the importance of maintaining stable budget policies.
FOREX.
GBPUSD keeps rallying in long-term perspective. According to the Department of Masterforex-V trading system , the currency pair has formed the “moment of truth” pattern against the upswing of H4. If there is another rally it will take the form of wave a (C ) or C H4. However, a bullish FZR is needed for this scenario to be confirmed. In this case the price may encounter resistance at 1.6546.
A downward movement will be possible in the form of the “Hound of the Baskervilles” pattern by Elder/MF of Daily1.The closest support will be found at 1,6057.
