The general consensus seems to be that the MPC will keep UK interest rates on hold at 0.5% at their meeting later today but many also feel that we will see a strengthening of language used similar to the ECB last week. The MPC does have a few hawkish members who may still hold sway and get rates 25bps higher but with the economy still very fragile, Mervyn King is likely to get his way and rates stay steady for now.
There don’t seem to be too many orders close to the money in the cable, with buyers remaining patient below 1.6100 and sellers remaining equally patient at 1.6350/1.6400. That may change later today.
