"Bank of England Governor, Andrew Bailey, intends to continue to provide markets with advance guidance of the Bank’s thinking, despite the fact that that information may not always be reliable. Bailey believes that any advance guidance given to the market should be considered to be subject to the caveat that such guidance is only valid if the economy is moving in the direction that the Bank expects. Using that model, to understand last week’s decision to keep interest rates on hold for longer should be interpreted to mean that the economy is not growing as the Bank had expected, and it has therefore decided to prioritize growth over inflation. Bailey was back on the wires yesterday for the first time since the Bank jolted markets with a notable change of direction. Although he still believes that inflation remains transitory, he commented that the Bank will have to act by tightening monetary policy should rising inflation begin to spill over into wage demands. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

Beyond Currency by CurrencyTransfer.com

9th November 2021 - Bailey, an unreliable boyfriend

"The fallout from the Bank of England’s decision to leave interest rates unchanged at its meeting last Thursday continues. Governor Andrew Bailey has been accused of misleading markets with his recent comments, to which his response has been weak. We expect to raise interest rates in the coming months, but no one said at which meeting we would start. Bailey's credibility has been badly affected, and it will take some time for him to be trusted again. Bailey contends that the decision was based upon a consideration of the latest economic conditions. This led the members of the Monetary Policy Committee to decide by a majority of 7-2 to leave interest rates unchanged. The failure to act at this point, as inflation continues to climb, will mean that when rates are increased, they may need to rise in a less gradual manner. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

8th November 2021 - Sterling hit by dovish Bank of England

"Members of the Bank of England’s Monetary Policy Committee voted 7-2 in favour of leaving short-term interest rates at the historically low level of 0.1% at their meeting, which concluded yesterday. The two members who voted for a hike were David Ramsden, Deputy Governor for Banking and Markets, who is concerned about what he calls rampant wage demands over the next few years and Michael Saunders. Saunders is a perennial hawk who believes that the level of support being provided to the economy risks fuelling expectations of higher inflation. The vote to hold fire on any rate increase came despite the Bank’s latest forecast for medium term inflation, showing that price increases could reach 5% by next April. At his press conference following the meeting, Bank of England Governor, Andrew Bailey commented that it is not the job of the MPC to act in accordance with market expectation. In that regard, Bailey is being compared to his predecessor, Mark Carney, who earned the reputation of being an unreliable boyfriend, often hinting at action by the Committee, only to fail to follow through when the meeting voted. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

5th November 2021 - Dovish BoE defies inflation prediction

"The Monetary Policy Committee will conclude its latest meeting at lunchtime today. While the outcome of the meeting remains too close to call, continued expansion in the economy means that the odds slightly favour a rise in interest rates. The size of any hike is also in question. It may be ten basis points, or it could be twenty-five. Whatever happens, the outcome of the meeting is sure to have a significant effect on the outlook for the economy in the short to medium term. Services PMI rose in October from 55.4 to 59.1 beating the flash estimate by a considerable margin. Business costs are rising at what is becoming an alarming rate, and these are being passed on to consumers, resulting in a continued rose in inflation. The surge in operating costs reported by services companies was the highest since 1996. Although the vote will be close, a hike in rates now would send a signal to the market that the recent comments regarding inflation being transitory have now been superseded by events. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

4th November 2021 - Cost pressures could force Bank’s hand

"Brexit has been predicted to have a larger negative effect on the UK economy than the coronavirus Pandemic. While that may be true in terms of the length of time the economy will be affected, in terms of GDP contraction, it won’t be as significant. That having been said, the supply issues that are concerning the MPC as it meets today, will continue far longer in the UK than they will in the EU for several reasons. The most obvious is the UK’s access, or lack of it, to the EU’s single market. That will be partially balanced by the wider scope that the UK has in sourcing raw materials and negotiating its own deals for their supply. The petty wrangles that exist with France over fishing quotas and access to ports are slowly diminishing, but unless and until there is an agreement that both sides can adhere to these issues will continue to flare up. The same is true of the Northern Ireland protocol, where both sides are playing a dangerous game, with the Good Friday Agreement continually in peril. The members of the Monetary Policy Committee will be agonizing over how they will vote when considering whether short-term interest rates should be raised or not. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

3 November 2021 - Bank of England prepares to hike rates

"The opposition Labour Party have had an easy time in criticizing the Government’s performance since the start of the Pandemic. Boris Johnson and his team have made some high-profile errors in some areas, and not acted fast enough in others. One Minster who has been fairly secure in his role, and has stood up to some of Johnson’s excesses, is Chancellor Rishi Sunak. While some may say that his role has been fairly simple since he took over from Sajid Javid at the start of the Pandemic, he has targeted the right sectors for support and while generous, cannot be labelled profligate. Yesterday, Sunak presented his Budget to the House of Commons, although in truth, most of the juicier proposals had been in the public domain as long as six weeks. One new proposal that the Labour Party will find difficult to criticize when the debate on the Budget begins later today is how the Government is planning to fight hardcore unemployment. Having faced questions over the withdrawal of £20 per week additional payment of the Universal Credit benefit, Sunak has, in basic terms, used the funds to increase the rate of pay for the lowest paid. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

28 October 2021 - Budget provides cuts and benefit boost for low paid

"Later today, Chancellor of the Exchequer, Rishi Sunak will present his Budget to Parliament. However, Sunak has drawn criticism from the Speaker of the House for continuing a recent trend for important announcements to be made at press conferences rather than in Parliament. Most of the most eye-catching policies have already been leaked. They include an increase in the minimum wage, the removal of the pay freeze in the public sector, a £5.9 billion payment to the NHS to cut waiting times, funding for the Government's levelling-up initiative as well as the creation of new T-Levels in schools that will provide qualification sin more practical subjects. The more mundane issues of excise duty increases and unpopular rises in taxation will be provided from within Parliament’s protected halls. Overall, the Budget is expected to usher in the new post-Covid, and to a certain extent, post Brexit world that has been promised. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

27 October 2021 - Budget to set tone for economic restart

"The minimum wage in the UK is set to rise from £8.91 per hour to £9.50 with the change to be confirmed in tomorrow’s budget. This means an increase of just over £1.000 a year for a full-time employee. The rise will, in Chancellor Rishi Sunak’s words, ensure that working pays and goes some way to ensuring that low pay is eliminated in this Parliament. The rise in the minimum wage could bring the Government a problem when negotiations begin for public sector employees, since it is more than twice the rate of inflation. A payment of £5.9 billion has also been announced for the NHS to reduce the backlog of operations caused by the lockdown and to improve the current length of waiting lists. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

26 October 2021 - Sunak’s definition of generous may put him in a minority

"There is little doubt that the UK economy has slowed considerably since its stellar recovery from recession. It will be difficult for Chancellor of the Exchequer Rishi Sunak to put in place plans to boost the recovery, since it is almost impossible to know exactly which of the problems are most pressing. Sunak is facing calls from industrial leaders' federations to leave taxation as it is, since with the current problems facing manufacturing and logistics, a rise in tax could easily blow them off course. Hauliers are facing the threat of having to pay significantly higher wages to drivers to be both able to employ them and keep them. That will certainly have a knock-on effect. Sunak clearly didn't reckon with the issues facing the economy like fuel prices, and high and rising inflation when he set out to plan for this Budget. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

25 October 2021 - Sunak facing Budget dilemma

"Prime Minister Boris Johnson is refusing to face the prospect of the country’s recovery stalling as inflation, supply chain issues and rising cases of Coronavirus threaten to derail his plans. The latest data for Covid-19 infections shows that more than 50k new cases were reported in a day for the first time since July. This marks just the second time since January that the rate has reached that level. Hospital admissions are rising too, although fatalities remain lower than were seen the last time infections were at the current level. The Government is refusing to countenance a return to restrictions that were ended a few months ago. It is relying heavily on the booster dose of the vaccine. The data shows that the majority of those infected are either below twenty or over eighty. With the half-term break taking place next week, this may provide a natural firebreak in the lower category. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

22 October 2021 - Rate rise could end recovery

"Inflation data for September was released yesterday and the headline fell marginally to provide a little relief to the Bank of England. The consumer price index fell from 3.2% year on year to 3.1%. While a single piece of data won't have too much effect on the Bank's plans, every journey starts with a single step. Factory gate prices as depicted by producer price data, continue to rise, climbing from 11.2% to 11.4% over the same period. While the country continues to face major bottlenecks in the logistics sector, exacerbated by the shortage of HGV drivers, inflation is unlikely to fall back below 3% in the short to medium-term. The country appears to be slipping back towards a fourth Coronavirus lockdown as, yet again, the Government is seen to dither over making the decision. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

21 October 2021 - Headline inflation falls marginally

"The UK economy is facing a series of headwinds that could halt the country’s recovery from the Coronavirus Pandemic in its tracks. First, the number of cases of Covid-19 is beginning to rise again with fatalities at a level not seen for six months, with NHS experts calling for the reinstatement of restrictions to create a firebreak. Second, the economy is being significantly affected by shortages of both raw materials and spare parts, as well as delivery issues that are holding up distribution of imports from the country’s ports. Finally, the Bank of England is having to consider the possibility of having to raise interest rates to head off rising inflation that Governor Andrew Bailey has been forced to accept is likely to continue to rise or at least remain at elevated levels well into next year. The issues being seen in the logistics sector, glibly dismissed as part of the transition away from the country's reliance on cheap labour post-Brexit, by the Prime Minister, could easily remain an issue for a significant period, forcing another U-turn. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

20 October 2021 - UK Feeling the force of upheaval

"Chancellor of the Exchequer Rishi Sunak is preparing his Autumn budget that will be presented to Parliament next week. He is trying to begin balancing the books but is also facing calls to continue spending. He is receiving requests for funds almost daily from colleagues who believe that the urge to splurge should continue. When he was doling out support at the height of the pandemic, he was just six months into the job and was fast becoming the darling of his Party. Now, things have changed almost completely. Far from providing free handouts, he is trying to rein in profligate Ministers. Sunak sees his role as creating a sustainable path that allows the Government to continue Boris Johnson’s levelling up agenda, while also looking for opportunities to save funds. Every Department is being tasked with contributing to the pot by making savings and efficiencies totalling 5% of their total budget. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

19 October 2021 - Sunak’s Autumn budget is set to be downbeat

"As the recovery from the Coronavirus outbreak has begun, Bank of England Governor, Andrew Bailey, has been confident that the rise in inflation that has gripped most developed economies is simply a reaction to the level of support being provided. This theory is about to be severely tested as the wholesale price of gas continues to rise. This is fed through into UK households in the shape of higher fuel costs and is also having a knock-on effect on other energy sectors, in particular, the price of oil. Petrol prices are already significantly higher. The pump price of standard unleaded petrol is now above £1.40 per litre. Bailey is beginning to feel the pinch and is concerned that the Central Bank will have to act to curtail what could fast become a major crisis for the recovery. Raising short-term interest rates to curtail rising inflation would be a fairly drastic measure, but the MPC may be left with no choice. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

18 October 2021 - BoE on verge of raising rates

"The Bank of England has been making every effort to maintain control over the withdrawal of support for the economy. Andrew Bailey, the Bank’s Governor, has been definite in his view that the increase in inflation that is being seen not only in the UK but across the entire developed world is temporary and will fade as supply chains return to normal. However, each economy is different, facing its own individual issues as well as those common to each. In the UK, the wholesale price of gas, which has quadrupled this year, will filter through to households and contribute to a more permanent increase in inflation. The Bank of England has been making every effort to maintain control over the withdrawal of support for the economy. Andrew Bailey, the Bank’s Governor, has been definite in his view that the increase in inflation that is being seen not only in the UK but across the entire developed world is temporary and will fade as supply chains return to normal. That problem will be shared with the Eurozone. The unique issue that is facing the UK is a major shortage of labour caused by Brexit. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

11 October 2021 - Economy facing a tough winter

Beyond Currency by CurrencyTransfer.com examines the daily trends that affect currency movement worldwide including economic, political, and other factors. 791142

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Beyond Currency by CurrencyTransfer.com

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