Policy Meetings for BOE & ECB Today – What We Expect?

We have two important policy meetings happening today for the European Central Bank and the BoE.

Both meetings will be closely watched and provide an opportunity for fresh direction for EURGBP.

From what we hear, the Bank of England is poised to raise interest rates on Thursday amid growing concern over the pressure on households from high inflation in Britain’s cost of living crisis.

City economists widely expect the central bank to increase its key rate from 0.25% to 0.5% in response to inflation hitting levels not seen for almost 30 years, with financial markets suggesting a 90% chance of an increase in borrowing costs.

With pressure mounting on households from soaring energy bills and the rising cost of a weekly shop, several leading analysts expect that the Bank’s nine-member monetary policy committee (MPC) will vote unanimously for a rise in rates.

However, with the economy under pressure since the emergence of the Omicron variant of coronavirus, an increase in borrowing costs is likely to compound difficulties facing businesses in the hardest-hit sectors.

Investors are also confident that persistently high inflation will force the European Central Bank to raise interest rates, and more than once this year, in a challenge to the central bank’s insistence that it expects to freeze rates at historical lows at least until next year.

Have your trading charts open from 14.00 GMT+2 onwards to see how these decisions will affect the markets.

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