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At the Forex currency market the British Pound Sterling rate continues descending trend which started last night due to deterioration of external background.
Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area, it reverted to outset movement and is not giving a clear signal. Stochastic Oscillator tends to go out of the overbought zone and is shaping a sell signal.

Forex recommendations: in case of break down at the level of 1.6450, the pair will go to 1.6425 and 1.6400. If downward breakdown does not take place, the pair will consolidate close to the current levels.

Minutes of the last meeting of the Bank of England was made public in the middle of the week, which took players by surprise: all 8 members of MPC voted to keep the rate unchanged. It means that balance of power between “doves” and “hawks” has changed significantly. Wil and Dale who had been previously set belligerently have joined the camp of conservatives. Posen voted for the increase in the volume of securities repurchase from market for stg500 billion.

Will said in the follow-up comments that policy on interest rate will entirely depend on the recovery of world economy and the economy of Eurozone.

It became known earlier that unemployment rate in the UK was at the level of 4.9% in July. At the same time, level of unemployed increased by 37.1 thousand.
In June, CPI in the UK fell by 0.1% m/m (4.2% y/y) against the forecast of growth by 0.2% m/m. Earlier Confederation of British Industry- CBI has reduced GDP forecast for the current year to 1.3% against the forecast of 1.7% in May. According to experts, sovereign crisis in Europe, debt problems in the U.S. and Japanese disasters will not enable British economy to strengthen considerably. Meanwhile, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if required.

In addition, house prices in the UK reduced by 2.1% m/m (-0.3% y/y) in August, as per Rightmove estimates. According to RPI estimates, index of retail prices in the country fell by 0.2% m/m (+5.0% y/y) in July; while in June the indicator had demonstrated the same level of +5.0% y/y.

It also became known this week that inflation in the UK remains unchanged on monthly basis in July (+4.4% y/y) against growth of 4.2% y/y in June. Inflationary pressure is growing and for the fragile British economy it is not the best moment.

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