he Pound found a reason for correction. Overview for 07.05.2020
GBPUSD is trading upwards on Thursday afternoon after the BoE’s decisions.
The British Pound is recovering against the USD on Thursday. The current quote for the instrument is 1.2386.
During today’s meeting, the Bank of England unanimously decided to keep the benchmark rate unchanged at 0.1%. In addition to that, most of the regulator’s members voted to leave the bond-buying program at £645 billion, although two members voted for a £100 billion increase.
In the comments, the Bank of England said that the coronavirus pandemic damaged the British labor market pretty hard and killed a lot of jobs in the country’s economy, hence decreasing people’s income. The regulator noted declines in industrial production and consumer spending. However, policymakers believe that it’s a temporary blip and everything will go back to normal as soon as the country’s economy recovers.
In the second quarter of 2020, the British GDP is expected to lose 25%, while the unemployment rate may skyrocket up to 9%. This is way too negative even for the Bank of England, which usually considers the worst scenarios, just in case.
However, the fact that the BoE doesn’t expand the QE program is very positive and the Pound enthusiasts really liked it.