The Sterling managed to pick up some ground against the USD on Wednesday before going into today’s Bank of England policy meeting. There will be absolutely no interest rate change from the U.K. today, but investors will stay attentive for any signs of change to quantitative easing policies. The new U.K. government has been adamant the past few days that they are going to undertake austerity measures in order to tackle the large deficits that exist. However, many tests remain for the real economy and politicians and central bankers may have a tough task when it comes to facing the reality of the market place. Economic data from the U.K. remains a mixed bag and investors have legitimate concerns about its capability to achieve growth. The GBP has found itself under pressure for a considerable amount of time and yesterday’s short term gains do not change these facts.
Written by bforex.com