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GBP: British Pound continues to grow steadily

At the Forex currency market the British Pound Sterling continues to grow steadily amid external positive factor on Wednesday.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to grow, confirming a previous buy signal for the pair. Stochastic Oscillator has entered overbought zone, indicating the prospect of the rising trend completion and the chances of immediate reversal.

Forex recommendations: if current sentiment will be maintained in the and in case of breakdown at the level of 1.6180 the pair will go to 1.6210 and 1.6260.

Representative of the Bank of England Mr. Sentence noted once again this morning that interest rates in Great Britain shall be increased now, as it will enable to restrain inflationary values. It is also required to   increase of the interest rate consistently to avoid sharp rise in the future.

Note that the situation in British economy still remains ambiguous. Statistics released yesterday showed that a number of approved mortgage requests amounted to 42 563 against 47 287 last month. Experts’ forecast was 47 000 requests.

According to the analyses, made by National Institute of economic and social researches “NIESR”, the UK government shall postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

Meanwhile, public sector is still in a difficult situation in spite the fact that the reduction program has not entered yet into its active phase. As the data released earlier shows, needs of the government in funds increased to the level of 27.85 billion GBP in December, while revenue in the budget from tax for the specified period amounted only to 27.34 billion pounds. 

 

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