PRCBroker exclusive financial report exciting introduction:
■The UK's real GDP growth rate in 2021 has the largest increase among the seven major countries, but will slow down in the future.
■Bank of England turns to financial austerity, but a sharp hike in rate hike in will likely lead to a slowdown and weaken the pound.
The UK Census Bureau announced on the 11th that the real GDP in December last year fell by 0.2% month-on-month, the first negative growth in five months. Despite the impact of the spread of the novel coronavirus Omickron infection, the growth rate in the October-December quarter was 1.0% higher than the previous quarter, maintaining the same growth level as the July-September quarter. In 2021, the real GDP grew by 7.5% year-on-year, the highest since 1941. Personal consumption, which accounts for 60% of GDP, turned into a growth of 6.1%, the highest growth rate among the seven major countries. The number of new coronavirus infections has increased dramatically since mid-December last year, but has been declining since its peak in early January. In the future, economic activities are expected to normalize by relaxing government behavioral supervision. However, economic support measures such as the 2021 employment maintenance plan have been completed, and fiscal support is expected to gradually decrease. The market expects that the growth rate of real GDP will slow down to below 1.0% month-on-month from January to March 2022, and the growth rate will slow down to 4.5% in 2022.
On the other hand, it is generally believed that the Bank of England (BOE) will raise a total of 75 basis points on the Monetary Policy Committee (MPC) in March and May. As the price of natural gas soared, the prices of goods and services rose sharply. The Monetary Policy Committee decided to raise interest rates by 25 basis points on February 3, but four of the nine policymakers insisted on raising interest rates by 50 basis points. According to market forecasts, the year-on-year growth rate of the Consumer Price Index (CPI) for January released on the 16th is expected to remain at a high of 5.4%, the highest level since March 1992. Although MPC's chief economist disagrees to invest heavily in currency tightening, the pound sterling rate rose to the USD level at $1.36, while the pound sterling yen rose to the 158 yen level. Whether the pound will continue to rise, pay attention to whether the pound is expected to reach the 200-day moving average 1.3701 USD, and whether the pound is reaching the February 10 high of 158.07 yen.
