empty
InstaForex - Official partner of Dragon Racing
InstaForex - Official partner of Dragon Racing
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
25.04.2022 02:25 PM
GBP/USD: Does Bank of England intend to continue raising repo rate?
Open trading account Open demo account

What is better for the currency: when your Central Bank is marking time or took two steps forward, promised a third, and then abruptly hit the brakes? The growth of EURGBP quotes shows that investors like the first option more. While the ECB is just about to say goodbye to QE and start raising rates, the Bank of England has already raised them twice. With regard to the third act of monetary restriction in a row, a snag has come out, which makes the pound fall into the abyss.

The factor of different rates of monetary policy has a particularly sharp effect on the GBPUSD pair. The futures market is confident that at the next two FOMC meetings, the federal funds rate will increase by 100 basis points, and by the end of 2022 – up to 3%. At the same time, the disappointing statistics on the UK casts doubt on the advisability of tightening BoE's monetary policy at the third MPC meeting in a row.

In April, business activity in Britain fell to a 3-month low, retail sales sank 1.4%, which is significantly worse than Bloomberg's forecast of -0.3%, and consumer confidence fell to its lowest level since the 2008 global financial crisis. Over the past three decades, inflation, higher taxes, and skyrocketing energy bills have been pushing the UK economy into recession. Bank of England Governor Andrew Bailey also speaks about it. According to Bailey, the regulator is teetering on the brink of overcoming an excessively rapid rise in prices, on the one hand, and preventing a recession in the economy, on the other.

Dynamics of business activity in Britain

This image is no longer relevant

The problem of high inflation is now not discussed only by the lazy. The IMF warns that due to skyrocketing prices, Britain's GDP will suffer the greatest losses among the G7 countries. According to an authoritative organization, economic growth in the UK in 2022 and 2023 will be 1 percentage point lower than in the January forecast.

IMF forecasts for GDP and inflation in G7 countries

This image is no longer relevant

Thus, signs of a slowdown in the economy with a simultaneous acceleration in consumer prices, which can only be called stagflation, are forcing the Bank of England to put on the brakes after two rises in the repo rate in a row. All the more surprising is the hawkish speech of MPC member Catherine Mann. Mann began to talk about the possibility of borrowing costs rising not by 25 basis points, but by 50 basis points at the May meeting of the BoE, which surprised investors a lot.

Nonetheless, Mann's speech may not change the mood in the market in any way. Ultimately, the Bank of England depends on input data, and not on the opinion of a single member of the Monetary Policy Committee. This circumstance, coupled with weak statistics on Britain and the intention of the Fed to bring the federal funds rate to a neutral level of 2.25-2.5% as soon as possible, makes the GBPUSD quotes fall.

Technically, the departure of the pair significantly below the fair value, its lower limit, and moving averages indicates the complete dominance of the bears on the market. In such conditions, the focus should be on selling GBPUSD in case of a daily close below the support at 1.275, or on growth, followed by a rebound from the resistance at 1.279 and 1.287.

GBPUSD, Daily chart

This image is no longer relevant

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
All Analytics
Fundamental analysis
USD/JPY. Analysis and Forecast Today, following the release of data showing a February slowdown in the national Consumer Price Index (CPI), the Japanese yen continues to trade with a negative tone, creating uncertainty
Irina Yanina
12:07 2025-03-21 +02:00
1630
Technical analysis
Forecast for EUR/USD on March 21, 2025 On Thursday, the EUR/USD pair continued its decline and closed below the 200.0% Fibonacci retracement level at 1.0857. This suggests that the downward move may continue toward the support zone
Samir Klishi
12:02 2025-03-21 +02:00
1600
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

Today, following the release of data showing a February slowdown in the national Consumer Price Index (CPI), the Japanese yen continues to trade with a negative tone, creating uncertainty
Irina Yanina 11:07 2025-03-21 UTC+2

US stock market getting ready for zero hour

The Federal Reserve has done all it can to calm the markets, but in 2025, the spotlight has shifted away from the central bank. The S&P 500 has brushed
Marek Petkovich 09:20 2025-03-21 UTC+2

What to Pay Attention to on March 21? A Breakdown of Fundamental Events for Beginners

There are no scheduled macroeconomic events for Friday. The euro and the pound have finally declined against the U.S. dollar. The Federal Reserve has done its part to calm
Paolo Greco 06:06 2025-03-21 UTC+2

GBP/USD Pair Overview – March 21: The Bank of England Had No Impact on the Current Situation

The GBP/USD currency pair traded very calmly on Thursday, as on Wednesday evening. As the chart below clearly shows, volatility has recently dropped to noticeably low levels. What
Paolo Greco 04:16 2025-03-21 UTC+2

EUR/USD Pair Overview – March 21: Markets Panicked in Vain, but That Doesn't Help the Dollar

The EUR/USD currency pair began showing a semblance of a downward correction between Wednesday and Thursday. The price has consolidated below the moving average on the 4-hour chart, but it's
Paolo Greco 04:16 2025-03-21 UTC+2

The Outlook for the Japanese Yen Remains Confidently Bullish

The Bank of Japan (BoJ) kept interest rates unchanged on Wednesday, and the market reacted neutrally, as this outcome was widely expected. BoJ Governor Kazuo Ueda stated that the risk
Kuvat Raharjo 23:46 2025-03-20 UTC+2

The Dollar Takes Back Its Own

Markets shoot first and ask questions later. Upon hearing Jerome Powell's assurance that the Federal Reserve had everything under control and that there would be no recession, U.S. stock indices
Marek Petkovich 23:45 2025-03-20 UTC+2

XAU/USD. Analysis and Forecast

Gold is experiencing a slight decline after reaching a new all-time high, remaining in a defensive stance. Currently, bullish traders are exercising caution, as indicated by overbought conditions
Irina Yanina 10:29 2025-03-20 UTC+2

Fed's message music to bulls' ears

The Fed is not throwing a lifeline to the S&P 500, but does it need one? Lifelines are for those drowning, while the market is merely spooked by a fleeting
Marek Petkovich 09:05 2025-03-20 UTC+2

Markets Are Stuck in a Vicious Circle with No Exit in Sight (Potential Decline for Bitcoin and Gold Prices)

The markets are currently experiencing significant shock due to a prevailing negative sentiment that looms over them like a heavy burden, with no resolution in sight. Given this situation
Pati Gani 08:23 2025-03-20 UTC+2

Top analytics

Relevance up to 22:00 2025-03-21 UTC--4
EUR/USD Forecast for March 21, 2025
04:43 2025-03-21
Technical analysis
Relevance up to 02:00 2025-03-22 UTC--4
USD/JPY: Simple Trading Tips for Beginner Traders on March 21. Review of Yesterday's Forex Trades
09:16 2025-03-21
Forecast
Relevance up to 00:00 2025-03-23 UTC--4
EUR/USD and GBP/USD March 21 – Technical Analysis
07:25 2025-03-21
Technical analysis
Relevance up to 20:00 2025-03-21 UTC--4
Trading Recommendations and Analysis for EUR/USD on March 21 — A Chance for the Dollar?
04:03 2025-03-21
Trading plan
Relevance up to 01:00 2025-03-22 UTC--4
Intraday Strategies for Beginner Traders on March 21
08:20 2025-03-21
Forecast
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.