Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
GBP Spikes Higher on Unchanged MPC as Language Turns Hawkish

GBP Spikes Higher on Unchanged MPC as Language Turns Hawkish

Nick Cawley, Senior Strategist


Talking Points

- Monetary policy settings left unchanged but language turns hawkish

- MPC votes 7-2 for rates to be left unchanged at 0.25%

Check out our new Trading Guides: they’re free and have been updated for the third quarter of 2017

GBP/USD firmed after the Bank of England (BOE) left all monetary policy settings unchanged, while the MPC voted 7-2 to keep interest rates unchanged. MPC hawks Ian McCafferty and Michael Saunders have now voted for an increase in the Bank Rate to 0.50% in the last three meetings. GBP however was boosted by the accompanying release that highlighted:

“If the economy follows a path broadly consistent with the August Inflation Report central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period thancurrent market expectations.”

The BOE also said that inflation is expected to exceed 3% in October, while underlying pay growth has shown some times of recovery, albeit remaining modest.

Data released by the ONS on Tuesday showed that UK inflation rose to 2.9% from 2.6% in July, while core inflation also moved higher, to 2.7% from 2.4%. And data released on Wednesday showed wage growth stagnating, with average weekly earnings unchanged at 2.1%, missing expectations of a rise to 2.3%.

The Bank Rate was left unchanged at 0.25%, while the Asset Purchase Target and the Corporate Bond Target remained untouched at GBP435 billion and GBP10 billion respectively.

GBP/USD touched 1.33000 post-release, having rallied from around 1.29000 at the start of September.

Chart: GBPUSD Five Minute Timeframe (September 14, 2017)

Chart by IG

For the latest IG Client Sentiment indicators, click here

--- Written by Nick Cawley, Analyst

To contact Nick, email him at

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.