GBPUSD Pops Higher, BoE Says Credit to UK Households Set to Fall
- GBPUSD has popped higher out of a rising channel in place since the beginning of this month.
- In its Credit Conditions Survey, the Bank of England says lending to households will likely fall back.
- Want to know where GBP could be heading? Check out our brand new Trading Guides: they’re free and have just been updated for the third quarter of 2017
GBPUSD has broken out to the upside from a falling channel but will need to stay above the channel resistance line to confirm that further strength could be on the way. Moreover, the pair eased a tad after the latest Bank of England Credit Conditions Survey forecast a drop in credit to UK households.
Chart: GBPUSD 30-Minute Timeframe (Month to Date)
In its survey, the central bank said the availability of secured credit to households was reported to have increased in the three months to mid-June 2017, driven by lenders’ market share objectives. But lenders expect availability to fall slightly over the next three months to mid-September, reflecting a changing appetite for risk.
Lenders also reported that the availability of unsecured credit to households had decreased in Q2, it added, and expected a further decrease in Q3. A changing appetite for risk was reported to be an important driver of this in Q2 and Q3, with a changing economic outlook also affecting expectations for Q3.
Earlier, the Pound was boosted by comments from a member of the BoE’s monetary policy committee in The Times newspaper. Ian McCafferty, one of the three rate-setters who voted for an increase last month, said the BoE should consider unwinding its £435 billion quantitative easing programme earlier than planned.
McCafferty added that the Bank ought to review its policy of leaving QE unchanged until interest rates are close to 2% and said he was minded to vote for a quarter-point rate rise again next month in a sign that the MPC will remain divided.
His comments came as the UK government prepares to introduce its Repeal Bill to Parliament today and followed news that UK house-price growth cooled in June as the inconclusive election weighed on demand, according to the Royal Institution of Chartered Surveyors.
--- Written by Martin Essex, Analyst and Editor
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