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What is the BOE?
The Bank of England, BOE, is the central bank of the United Kingdom (UK) that oversees monetary policy, acts as the government’s bank, and bears responsibility as the lender of last resort.
Dovish VS Hawkish
The MPC members are distributed on a scale from Dovish to Hawkish. The dovish tend to be pessimistic and view the economy in need of stimulation; therefore, they tend to decrease bank rates and, thus, increase money supply.
However, the hawkish are on the other extreme end with an optimistic view of the economy; therefore, they tend to increase bank rates and, thus, decrease money supply and control inflation.
The remaining policy members include a minority titled the “Centralists”. They usually look at the market and tend to be data-driven, focusing on what actually is happening in the market.
Mark Carney, chairperson of the MPC and Governor of the BOE, is considered to be a Centralist; however, he leans closer towards hawkishness rather than dovishness.
How to Trade the MPC?
GBP Strengthens Slightly
Please note that the above directional suggestions do not take into account the current Geopolitical or Market positioning pressures that could easily cause the opposite to occur. With this in mind, it is always beneficial to keep yourself abreast of the current market conditions when planning your trades.
The Bank of England Interest Rate
The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75% during its May June policy meeting and reaffirmed its pledge to the gradual and limited rate rises over the forecast period, despite the persistent concerns about the slowdown in global growth and the ongoing Brexit uncertainties.
The central bank lowered its outlook for the economy to zero in the second quarter of the year from its previous estimate of 0.2% growth.
The Committee continues to judge that, were the economy to develop broadly in line with its Inflation Report projections that included an assumption of a smooth Brexit, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.
2019 MPC Meeting Dates
The MPC usually meet 8 times a year, each of which they announce their bank rate decision and release the minutes at the conclusion of the meeting. Below is a table of the upcoming meetings and the market’s reaction to the decision of the previous meetings. The dates of the meetings are as found in Forex Calendar.