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Mon, Jul 22, 2024

BOE to Release Interest Rate Decision Amid Cost of Living Crisis
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EURGBP is moving in an Ascending channel and the market has rebounded from the higher low area of the channel.

The Bank of England is all set to release its interest rate decision and economists are expecting a potential 25bps hike to control the ongoing cost of living crisis in the nation. Here is all you need to know about it:

Rishi Sunak Deal Backlash

Rishi Sunak is going to try to have his revised protocol for Northern Ireland approved by the House of Commons, despite the fact that many staunch Brexit supporters on the Tory side are opposed to it and consider it an unacceptable failure that does not achieve any of the claims it makes. Sunak is likely to face a Tory rebellion on Wednesday over the revised post-Brexit trade arrangements in Northern Ireland as a result of the verdict of the European Research Group (ERG), which followed a similar rejection by the Democratic Unionist party on Monday. However, it appears unlikely that this rebellion will be significant.

GBPUSD Monthly TF analysis Market is moving in the Descending channel and the market has rebounded from the lower low area of the channel 1

GBPUSD is moving in the Descending channel and the market has rebounded from the lower low area of the channel.

The European Research Group (ERG) is still influential, but it is a significantly less powerful force than it was during the period of Brexit votes during Theresa May’s tenure as prime minister. During that time, the ERG could boast of having close to 80 members ready to disobey the government in mass. The vote on Wednesday will not be to adopt the entirety of the proposal that was presented by Sunak after discussions with Ursula von der Leyen, the president of the European Commission, one month ago.

UK Chancellor Rishi Chunak may increase the wage of minimum level it will benefit individuals.

This not only grants the devolved Stormont assembly an effective veto over any new EU laws but also creates a green lane for the transportation of the majority of products between Northern Ireland and the rest of the United Kingdom. Ministers have described this as a “green lane” for trade. However, Heaton-Harris told the committee that the current situation, in which the DUP is boycotting the devolved assembly because it is unhappy with the existing protocol that was negotiated by Boris Johnson, is untenable. Heaton-Harris noted that the devolved assembly has not met in over a year because of the DUP’s opposition to the protocol.

BOE Breeden Speech

Executive Director Sarah Breeden of the Bank of England recently gave a speech where she discussed the links between monetary and financial stability. She reveals, “There were many lessons learned from the GFC. One was that monetary stability is not a sufficient condition for financial stability – more was needed. We needed macroeconomic policymakers to take account of ‘systemic risks’ in the financial system. That means understanding that the total risks in the system might be larger than the sum of their parts. Why? Because these risks can amplify each other, particularly in times of stress, and as they do so can harm economic growth.”

GBPJPY Daily TF analysis Market is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

GBPJPY is moving in an Ascending channel and the market has rebounded from the higher low area of the channel.

“In the UK, this realization led to the creation of a new committee with clear responsibility for the stability of the financial system as a whole – the Financial Policy Committee (FPC) on which I sit today. The FPC’s primary objective is to pursue financial stability. That means we spend most of our time looking at the horizon, trying to spot the big risks to financial stability and to the economy – tail risks as we call them. And then we take actions in advance of those risks crystallizing – known as macroprudential policies – to reduce their potential impact. The Bank has a number of other important responsibilities too.”

GBPAUD H1 TF analysis Market is moving in the box pattern and the market has reached the resistance area of the pattern

GBPAUD is moving in the box pattern and the market has reached the resistance area of the pattern.

“For example, we have the Prudential Regulation Committee, which covers the macroprudential supervision and regulation of individual banks and insurers. But today I want to focus on the MPC and FPC and how their different objectives for monetary and financial stability interact. These objectives are complementary: achieving one helps us to achieve the other. Indeed I like to think of them as two sides of the same coin. But the way they interact can be complicated. I’ll cover some theory on this, and consider a few of the shocks we faced recently. I believe the setup we have – close but separate committees – has handled these challenges well.”

Bank of England

“As interest rates rise after well over a decade at very low levels, it’s an important time to look again at this topic. Monetary and financial stability are complementary, representing two sides of the same coin. How they interact is complex. And recent years have presented challenges for both objectives. Having two separate and focused committees with overlapping membership has worked well. And these complex interactions have been managed through: shared analysis; policy action to build resilience in advance of potential stress; and targeted, differentiated operations when needed, all supported by focus and accountability for our distinct remits.”

The UK Energy Crisis

According to the government’s expert on low-carbon gas, ministers should grant the go-ahead this year for the blending of hydrogen into the UK gas network as long as it can be demonstrated to be safe. This recommendation was made by the government adviser. As part of its effort to reach its 2050 goal of net zero carbon emissions, the government has previously announced that it will make a decision by the end of the year about whether or not to include up to 20 percent hydrogen in the gas distribution networks.

GBPCHF Daily TF analysis Market is moving in the Descending triangle pattern and the market has reached the lower high area of the pattern.

GBPCHF is moving in the Descending triangle pattern and the market has reached the lower high area of the pattern.

Due to the fact that residential properties are responsible for about one-fifth of all greenhouse gas emissions, it is essential to replace boilers that are fueled by natural gas. Since it does not create carbon dioxide when it is burned, low-carbon hydrogen is regarded as a more environmentally friendly alternative to fossil fuels. Nevertheless, a number of experts have cautioned that the process does result in the production of nitrogen oxides, which is a pollutant. When the gas is created by the electrolysis of water using renewable electricity, it is referred to as green hydrogen.

Natural Gas Storage

On the other hand, the gas is referred to as blue hydrogen when it is manufactured from natural gas, with carbon dioxide as a byproduct, which is then caught and stored. Opponents have suggested that combining hydrogen with natural gas might extend the use of natural gas for household heating and that it is less economically viable and less efficient than alternatives such as electric heat pumps or solar thermal.


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