Mervyn King, BoE Governor, is sure that the rate of inflation in the UK will be declining. In late 2012 it is expected to reach 2%. In January inflation hit the level of 3.6%, which only increases the probability of an inflation decline and makes it possible to expand the QE program (bond purchases).
In the meantime, analysts are waiting for the official inflation forecast. It will be published on Wednesday.
In the meantime, George Osborne assures that the UK authorities will keep doing their best to reduce the budget deficit and to improve the financial situation in the UK. It will give the bank of England an opportunity to ease its monetary policy.
According to the Department of Masterforex-V Trading System, GBPUSD keeps forming the long-term downswing – wave A/B. At this point, A(C )/C is completed. A break below 1.5643 will give way to continue the downtrend in the form of sub-wave C(C ). The closest levels of support are 1.5607/01, 1.5579/74, 1.5532/31. The downtrend will be completed as soon as the price breaks above the MF sloping channel and pivot 1.5769.
