Weekly Forex Report

The quarterly inflation report published on 13 November reveals upbeat forecasts on growth and unemployment by the Bank of England (BoE). According to the respective central banks’ predictions, the 2.9% UK growth in 2014 should rank among the best in advanced economies. Unemployment should also improve faster than expected. The 7% threshold used in the BoE’s forward guidance is more likely than not to be reached in 2015, suggesting that the BoE may already consider an interest rate hike in 2015. While previous BoE’s forecasts were more pessimistic than the market, the new forecast are now more optimistic than the consensus.