The Bank of England kept interest rates at 0.50% at last week's meeting, which was in line with expectations. Moreover, the markets had expected a unanimous decision to maintain rates at 0.50%, but two of the nine members voted in favor of immediately raising rates. The language of policymakers has become increasingly hawkish, and the MPC vote is another signal that there is a strong likelihood that the BoE will press the rate trigger to come in May.
The BoE FPC Minutes released today showed that the BoE policy members think a progress has been made in mitigating Brexit risks, but the problem is that firms may not have necessary permissions to provide services after Brexit. Moreover, the FPC is said to "consider possible forms for the future relationship between UK and EU in financial services". The counter-cyclical capital buffer (CCYB) for banks held at 1%, but there are arguments for a "measured increase" in CCYB, so it has been left unchanged to give banks more time to adjust.
Overall a rather neutral and cautious comments from BoE members with a positive tone regarding the perception of Brexit negotiations and progress. Not too much hawkish comments regarding the interest rates or the future possibility of the next interest rate hike.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market continues to break through resistance line, but the pair was flat in the Asian session after the top at the level of 1.4247 was established. Since then, the price is falling towards the main channel trendline support around the level of 1.4130 as it is out of the acceleration channel already. The next technical support is seen at the level of 1.4077, but if the BoE FPC Minutes news will be worse than anticipated, then the price might drop to the level of 1.3981 support.
