The combination of high inflation and weak growth | 09 Mei 2022

09 Mei 2022, GBP/USD

GBPUSD trading plan:

People and businesses in Britain need to realise they are unlikely to recover the income lost to high inflation any time soon, the Bank of England's chief economist said. The BoE forecast inflation would surpass 10% later this year, causing a sharp economic slowdown - and possibly a recession - Huw Pill said the central bank was unable to cushion people from surging energy and goods prices. Companies might also absorb some of the hit via smaller profit margins, Pill said. The combination of high inflation and weak growth raises difficult questions for the BoE about how many more rate hikes will be needed after the four it has done since December, the fastest pace of monetary tightening in 25 years.

Investment idea: sell 1.2348 and take profit 1.2280.

David Johnson
Analyst of «FreshForex» company
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