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At the Forex currency market the British Pound Sterling rate tries to rehabilitate after sales for five consecutive sessions last week.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD however it is going down, trading volumes are also decreasing, which indicates that a sell signal is being formed for a pair. Stochastic Oscillator remains in the oversold zone, maintaining a pair sell signal, although the signal is abating.

Forex recommendations: upward correction can lead the pair to 1.6400. However if “bears” are back in the pair, then the target of the sales will become the levels of 1.6345 ? 1.6320.

General Director of the Confederation of British Industry (CBI) Mr. Cridland believes that Finance Minister of the UK Mr. Osborne does not need to glance back at the lack of growth of the British economy during implementation of measures to reduce government spending considerably. “ We continue to expect that recovery will proceed this year as well as next year, however its pace will be slow.- thinks CBI.

CBI expects that the growth in the British economy will be by 1.7% this year; and by 2.2% in 2012. Reduction in the government spending will help decrease GDP by another 0.75% on average. 

At the meeting earlier the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, volume of assets purchase was also kept unchanged- at the level of stg200 billion. Comments of the regulator did not contain any new development, and this seems natural; the situation in the British economy is far from being stable. 

Deloitte & Touche LLP believes that the Bank of England will not raise rates until 2013 – according to observers, economic growth in the country is still poor, basic economic trend in the UK is also not too good, which encourages to leave rates at the current level at least until the end of this year and throughout the next year as well. Inflation in the country is twice as high as 2% projected by MPC. Deloitte & Touche LLP indicates that British GDP will amount to 1.5% in 2011, the same as next year; while inflation will reach 4.5% in 2011 and 1.8% in 2012.

According to the rating agency S&P the rise in the interest rate can be expected in the next three months. “It can happen due to the fact that inflation level will rise again after the decline in March and it can reach the level of 5% in QIII.” – stated lead economist of the agency J-M Six. 

The head of the Bank of England Mervyn King believes that the rise in the interest rate can exacerbate problems of national debts. Such statement can be well regarded as support to “dovish” sentiments in the Monetary Committee.

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