Bank of England likely to hike interest rates in May

The Bank of England, during its March policy meeting, had kept its rates on hold. However, the policymakers are expected to eventually hike rates again as soon as the May meeting, noted Wells Fargo in a research report.

Meanwhile the job market is on a strong footing with the jobless rate having recently fell to 4.2 percent. With the PMIs remaining strongly in expansion territory and back-to-back rises in industrial production, there is a case to be made for another strong outturn for economic growth in the first quarter. The first estimate of the nation’s first quarter growth is set to be released tomorrow. The first quarter growth is expected to have stayed at 1.4 percent.

“A pickup in the pace of growth would further underpin our expectation for a rate hike at the May 10 meeting of the Bank of England”, added Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at 46.8364, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 94.1146. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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