Dear Reader,

Today's overview of economic news and market action

• BoE left monetary policy on hold as expected yesterday …
• However, BoE appears to be edging closer to cutting rates …
• Against this backdrop, sterling weakened …
• Elsewhere, the dollar was in the ascendancy …
• Sees EUR/USD opens in the lower half of $1.08-1.09 …
• GBP/USD is down at $1.26 …
• EUR/GBP is in the top half of 85-86p …
• German Ifo (March) and remarks from ECB official Lane in focus today …

World economy grew at a very modest pace in 2023. Subdued growth expected again in 2024, with continuing weak performance by Eurozone in particular. 

Inflation fell sharply last year and further moderation in price pressures anticipated in 2024.

BoE gradually moving towards cutting interest rates

The March meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank keep its key interest rate unchanged at 5.25%. This decision was very much in line with market expectations.

Fed primed for 75bps of cuts in 2024, starting in summer 

The US Federal Reserve Open Market Committee’s second meeting of 2024 saw its key interest rate left on hold last night. The target range for the Fed funds rate remains at 5.25-5.50%, a 22-year high.