Bank of England MPC Decision and GBP/USD Exchange Rate Impact

The Bank of England's Monetary Policy Committee (MPC) will meet this week to determine the future of monetary policy and announce its decision on Thursday, November 2. Alongside the decision, the central bank will release the Monetary Policy Report, which includes economic analysis and inflation projections used by the MPC to inform interest rate decisions.

The BoE focuses on three key data figures when making policy decisions: private-sector wage growth services inflation, and the vacancy-to-unemployment ratio. Like other major central banks, the BoE has adopted a "higher for longer" approach, aiming to keep benchmark rates elevated for an extended period to manage inflationary pressures.

In October, UK shop price inflation eased to 5.2%, the lowest rate in over a year, primarily due to falling prices of homegrown food. The Consumer Prices Index (CPI) rose by 6.7% over the previous 12 months, unchanged from August. Every month, CPI increased by 0.5% in September 2023, the same as in September 2022.

The US Federal Reserve (Fed) recently left interest rates at 5.5%, which only had a limited impact on the financial markets. Fed Chairman Powell's comments were mixed: he indicated that rate cuts are not being considered but questioned the need for further rate hikes. Powell also mentioned that policymakers are keen to adopt a sufficiently restrictive stance but could not determine whether this point has already been reached. GBPUSD is following the majors as a solid correction is happening after the dollar selloff the next resistance level is at 1.2450.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2600	1.2550	1.2450	1.2300	1.2260	1.2200