BoE Inflation Report Sends Pound Higher

The Great Britain pound surged on the previous trading session after the Bank of England issued a very positive outlook, leading to speculations that it may tighten monetary policy sooner than was previously expected. The currency was little changed today.
As was expected, BoE Governor Mark Carney was very optimistic in the inflation report, revising most forecasts positively. Of a particular note is the prediction that the unemployment rate will fall to 7 percent (the threshold for the BoE to consider raising interest rates) in the third quarter of 2015, while previously it was not expected to reach that level before 2016. Such revision led to talks that the central bank may reduce monetary stimulus earlier.
The current employment data supported the positive outlook. The number of people claiming Jobseeker’s Allowance fell by 41,700 in October from September, dropping more than was forecast. The unemployment rate ticked down by 0.1 percentage point to 7.6 percent.
GBP/USD jumped from 1.5903 to 1.6054 yesterday and traded at 1.6032 as of 1:23 GMT today. GBP/JPY rose to 159.38 after climbing from 158.42 to 159.31. EUR/GBP was near 0.8405 following yesterday’s drop from 0.8446 to 0.8397.

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