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The British Pound Sterling is traded slightly upward at the Forex currency market on Monday, as market positively assessed Greek news, however it is not quite sure of future prospects.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from bottom to top and came into the positive area; it is moving along the signal line now and is not giving a clear signal. Stochastic Oscillator is going further down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at 1.5780, the pair GBP/USD will go to 1.5760 and 1.5740. Consolidation near current levels is possible.

According to the data released last week, volume of output in construction sector fell by 0.5% on quarterly basis (+0.9%y/y) in December against preliminary growth expectations of 0.2%.

Authorities have already reacted to statistics and stated that the index is not the reason to revise GDP data in the country.

We would remind that complex situation preserves in the labour sector. According to estimates, unemployment rate rose to 8.4% in November against the forecast of 8.3%, level of unemployed increased by 118 thousand over three months against +128 thousand in the previous three months. Situation is similar in the retail sector as well.

A meeting of the Bank of England was held yesterday: asset repurchase program was increased by 50 billion pounds, up to325 billion pounds, as expected. Mr. Osborn said commenting this decision that the increase of QE will help achieve inflation target (official target is 2%and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE.

According to MPC estimates, economic activity in the country went down slightly in Q4 2011, however recent studies showed a positive picture. MPC believe that volume of industrial output will gradual lyincrease in 2012 and recovery in household income will help economic growth. Another important factor is reduction of CP as it will boost demand. However, tough lending conditions and cost-saving measures can be an obstacle. Unemployment will restrain inflationary pressure. QE program is designed for 3months. The head of the Bank of England Mr. King emphasized earlier that recovery of the British economy will be slow and jerky. He also said that terms of lending are detrimental to economic recovery. At the same time the Bank of England is ready to provide liquidity to banks if a need will be.

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