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At the Forex currency market the British Pound Sterling rate continues to slide down gradually, while situation in the market remains uncertain.

Forex forecast: MACD indicator for the pair GBP/USD is growing in the negative area, shaping a buy signal. Stochastic Oscillator is changing direction again in the neutral zone; now it moderately goes upward, giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of break down at the level of 1.6010, target for the sale will be the levels of 1.6000 and 1.5990.š If downward breakdown does not take place, the pair will stay at the current levels.

The data released this morning showed that the UK house price balance RICS fell by 24% in October against the forecast of -23%. Consumer confidence index Lloyds reduced to -72 points in October versus the level of -67 points a month earlier.š It is a negative signal reflecting among other things, negative impact of the European debt problems.

Meanwhile, Member of MPC Mr. Dale says earlier that he expects sharp decline in CPI at the beginning of 2012. According to Mr. Will, a representative of the Bank of England and MPC, British economy demonstrates slow growth rate and a chance of recession in Q4 would not be a great surprise. Representative of the Bank of England Mr. Bean has said earlier that growth rate of the British economy is slowing down in the second half of the year and he believes that real spending of the households will fall even moreš significantly in the second half of the year. The head of the Bank of England, Mervyn King anticipates sharp fall in inflation in 2012. CPI in the UK rose by 0.6% m/m (+5.2% y/y) in September against the growth of 4.5% y/y in August. Obviously, inflationary pressure has soared upward, which creates new impediments to economy.

Debates about monetary policy are still going on in the UK. Thus, Mr. Bean noted last week, that, as the result of QE program, the level of inflation can rise by 0.5%; however positive effect of the incentive program is that GDP will get additional +0.5%.

At the meeting which is going to take place this week, the Bank of England is expected to keep interest rate unchanged at the level of 0.50% per annum. The follow-up comments of regulator about general economic situation and inflationary pressure may be of interest.

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