The Bank of England delivered another interest rate hike.
The BTC/GBP and GBP/USD pair diverged after the report.
It has formed a bullish flag pattern on the daily chart.
The BTC to GBP pair moved sideways after the latest Bank of England (BoE) interest rate decision. Bitcoin was trading at £23,000 on Thursday, where it has been in the past few days. This price is about 7.2% below the highest level this month. On the other hand, the GBP/USD pair slipped to a low of 1.2625, the lowest level since June 30th.
Bank of England decision
The BTC/GBP pair moved sideways after the latest interest rate decision by the BoE. In a statement, the bank decided to hike interest rates again by 0.25% to a 15-year high of 5.25%.
The committee did that in a bid to fight the elevated inflation. In a statement, Governor Andrew Bailey said that the hike was necessary to combat the stubbornly high inflation. In a statement, he said:
“Inflation is falling and that’s good news. We know that inflation hits the least well-off hardest and we need to make sure that it falls all the way back to the 2% target. That’s why we’ve raised rates to 5.25% today.”
The most recent data showed that the headline consumer inflation dropped from 8.3% in May to 7.9% in June while wage growth jumped by 7.7%. There are signs that the British economy is slowing.
For example, data published this week by Nationwide showed that the country’s house price index plunged at the fastest pace in over a decade. Still, the bank believes that the UK will narrowly avoid a recession this year.
NEW@bankofengland raises interest rates for 14th successive meeting: up by 0.25 percentage points to 5.25%.– UK to avoid recession but economy effectively flatlining with 3yrs of near-zero growth, acc to Bank forecasts.– Rates to stay high for a long time, Bank signals
— Ed Conway (@EdConwaySky) August 3, 2023
Bitcoin reacts moderately to the actions of central banks like the Bank of England (BoE), the European Central Bank (ECB), and the Bank of Japan (BoJ). It also reacted mildly to actions of the Federal Reserve, which delivered its last rate hike of the year.
BTC/GBP technical analysis
The daily chart shows that the BTC/GBP pair rose to a key resistance level at 24,711 in July. This was an important price since it was the highest point in April. A closer look shows that the pair has formed a bullish flag pattern. Also, it has risen above the 25-day and 50-day moving averages.
Therefore, the BTC to GBP price will likely have a bullish breakout in the coming weeks. If this happens, the next level to watch will be at 24,711.
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