- Philip Shaw, Investec chief economist
The cable was trading in a narrow range following the Bank of England meeting, as policy makers offered no surprises, staying pat both on the interest rate and the stimulus programme. The GBP/USD pair moved slightly lower on Thursday, trading around 1.6764 level, posting no impressive moves amid soporiferous central bank's meeting.
During its April's policy meeting the nine-member Monetary Policy Committee decided to keep the key refinancing rate at a record low of 0.5%, while the size of its bond-buying programme was also unrevised at 375 billion pounds. A move was widely expected, as Carney made it clear there will be no action any time soon. Nonetheless, investors were expecting for some hints about future moves and possible clarification of the forward guidance. Rapid growth during 2013 added more pressure on the BoE, however, the latest drop in inflation provided additional room for Carney. The inflation rate currently stands at 1.7%- a four-year low and slightly below the official target of 2%. Earlier in April, the IMF claimed the U.K. will be the fastest-growing economy in the G7 this year. According to analysts, the second quarter of 2015 can be a perfect timing to start raising interest rates. By that time inflation is expected to move back into the comfortable zone, while the general drift of comments from the MPC members supports this forecast.
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