Bank of England to Gradually Reduce Interest Rates as Inflation Falls ⁤to Target

The Bank of England is set to gradually withdraw its aggressive policy ​tightening measures as the UK inflation rate falls to the target of close to‍ 2%. Bank of ‍England Governor Andrew Bailey pointed out that as the Bank of England’s confidence in controlling inflation increases, interest rates will be gradually reduced. After rising for five consecutive days, the pound‌ fell back today against the US dollar. The short-term selling pressure on the market‌ increased, but its overall upward trend has not changed.

The‍ UK inflation rate fell⁢ back to the central bank’s target level of 2% for the first time in ⁣nearly three years in ⁢May this year, and has remained low in recent months. ​In August, ⁤the Bank⁣ of England announced a 25 basis point interest rate cut, lowering the ‍base rate from 5.25% to 5%,‌ in view of ‍the sufficient easing of inflationary pressure. This is the first interest rate cut by the​ Bank of England since March 2020.

Bank of England Governor Andrew Bailey said interest rates in the UK ⁢are unlikely⁤ to fall back ⁤to ultra-low levels unless ⁢there is another financial crisis or an economic shock similar to the scale of the epidemic. Inflation has fallen significantly,⁤ Bailey said.⁤ Our goal is to ensure that it reaches the 2% target level sustainably. Although the current composition of inflation is still uneven, we are encouraged by the⁤ downward trend in the inflation rate and interest rates​ will be gradually reduced.

This Friday, the U.S. Department of Commerce will‍ announce the annual rate of the U.S. core PCE⁣ price index in August. The previous value was 2.6% and the expected value was 2.7%. It is ​expected to increase⁣ by 0.1 percentage point. According to historical data, the annual PCE rate in the​ United States has been at 2.6% for three consecutive months, indicating a significant bottoming trend.

GBP/USD Analysis

Technically, GBP/USD hit a high and then fell back in the early trading today, and ⁢the⁤ market’s selling⁤ pressure increased, but its overall upward trend has not changed.⁢ The daily K-line chart​ shows that GBP/USD ⁢has once again formed a fluctuating upward channel, and the moving averages are in a bullish arrangement. The 5-day and 10-day moving averages continue to move ​upward, indicating that the‍ market’s bullish forces are still dominant.

The initial upward resistance for GBP/USD is​ at 1.3450, further‌ resistance is at 1.3500, and the key ⁤resistance is⁤ at 1.3600; the initial downward support for GBP/USD is at 1.3300, further ⁣support is at ‍1.3250, and the more critical support ‌is at 1.3200.