The markets are awaiting the mid-dealings of the European session today, Thursday, May 11, the results of the Central Bank of England meeting and its monetary policy, as expectations indicate that the bank will raise interest rates by 25 basis points, to reach 4.50% for the twelfth time in a row, by a vote of seven members, to reach their highest levels since the year. 2008.

The last inflation reading in the United Kingdom came at the highest levels of 10%, as the consumer price index in Britain, which measures inflation, grew by 10.1% in the 12 months ending in March, compared to 10.4% in February, while expectations were for a slowdown of 9.8%, while it declined. Inflation on a monthly basis increased by 0.8% in March compared to a decrease of 1.1% in February. The main index, excluding food and energy prices, was 6.2%.

Inflation in the United Kingdom is the highest among the Group of Seven and the lowest among them, as the United Kingdom was directly affected by the Russian invasion of Ukraine, and the markets expect that the Bank will raise interest rates up to 5% to control inflation, although economic activity will be affected with its rise.

The markets will monitor the statements of the Bank’s Governor, Andrew Bailey, and will look for signs as to whether the bank will continue to tighten monetary policy or will temporarily stop raising interest rates, in addition to the committee’s expectations that will be issued today for inflation and growth, as the bank is expected to raise its growth expectations after expectations regarding this potential recession have receded. year.

The movements of the sterling pound will be based on the bank’s expectations for the future of monetary policy and the fight against inflation, especially since the 25 basis point hike is now calculated at the current prices.

Therefore, if the committee deems that the bank is looking for higher interest levels in the coming period, the sterling pound will react positively The split of the vote among the nine members of the bank will have an impact on the movements of the pound sterling, as it is expected that seven members will vote to raise it by 50 basis points and two to keep it unchanged. If we witness any change in this division, it will have a direct impact.