This afternoon will see the latest Bank of England (BofE) interest rate meeting, something that of late has caused relatively little market movement.
However today’s meeting is being scrutinised and viewed rather more closely than previous months as it is expected that the BofE will raise interest rates for the first time in over 10 years.
What could be the outcome for the Pound?
It is widely expected that the central bank will raise rates, and indeed the pound has been spiking in recent days on these rumours, so many would argue a rate hike has already been heavily priced in. I would argue this is the case, however I think the market will focus on how the 9 members of Monetary Policy Committee (MPC) that actually make the decision, voted.
Analysts expect a 6-3 split in favour of a rate hike, and should this be the case I would actually expect little movement for sterling. If, however, the vote is 7-2, 8-1 or even 9-0 then I would expect to see some sterling strength post the decision at 12:00.
In the same way that anything greater than the 6-3 expected should see sterling strengthen, then if the vote is 5-4 and closer than analysts thought, then I would look for some sterling weakness. Of course if they decide not to hike at all then I would expect some heavy sterling losses.
Either way today is set to be a busy day for the pound and for this reason should you need to discuss a future money exchange or would like to run through the currency service we provide then please get in touch.