The pound fell before the meeting of the Bank of England

On Tuesday, the British pound showed a decline in a pair with the US dollar amid a decrease in the general concern of investors about the situation in the banking sector. The current quote of the GBP/USD pair is 1.2194.

To date, the interest rate policy of the leading central banks is of greater interest to market participants. Meetings of the boards of the US Federal Reserve System and the Bank of England will be held this week.

Expectations that the Bank of England will leave interest rates at the same level are 44%, and the probability of a 25 basis point rate hike is estimated by market participants at 56%. Investors are also waiting for inflation data in the UK – analysts predict that they will indicate a weakening of price pressure.

Equiti Capital Chief Economist Stuart Cole notes: «The data received recently were ambiguous. The economy is showing stronger growth than expected, and the labor market remains in high demand.»

Moreover, earnings growth seems to be slowing down, and inflation in the service sector has probably already peaked. Therefore, the probability that the Bank of England will raise interest rates is quite high, and this should support the pound.