At 08:30 GMT, PPI data are due where there will be focus on it after rapid rise in CPIfor February to 4.4%. Annual PPI output will retreat to 5.1% in March from 5.3% and yearly PPI input will plunge to 12.5% from 14.6%. Inflation remains one of the major threats to the British economy. Now, there is more pressure on the BoE to raise borrowing cost after the ECB had raised interest rate by 25 basis points in April.
Yesterday, the BoE opted to leave both interest rate and AFPamount unchanged in April at 0.50% and 200 billion pounds, yet a change in the monetary policy by the BoE seems to take place over the coming few months, probably in the second half of the year, where the change may come in both directions through raising interest rate to lower inflation and expanding the APF to boost growth. The pound declined against the dollar after the rate decision to pare some of the advance over the previous four sessions.
The uncertain outlook for the British economy and the unchanged monetary policy by the BoE amid the improvement in US data, where yesterday initial jobless claims fell to 382,000 last week from the revised 392,000 a week before, suggest that the pair will witness some bearishness in the coming period.
Originally posted here
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