The Bank of England interest rate decision is scheduled at 12:00 am GMT and market participants expect no change this month (rate should stay at the level of 0.50%). Moreover, the Asset Purchase Facility should remain unchanged as well at the level of 435bln Pound.

The November hike by 25 bp was commented as a dovish hike, which was to give the impression that BoE did not start a monetary tightening cycle. For this reason, the market participants can safely assume that now the interest rate will be left at 0.5%. The market does not discount anything for this meeting and only until the decision in May 2018 the market valuation of the increase approaches 40%. Data from recent weeks were close to expectations, which means, however, that economic growth is at a low level of 0.5%, but CPI at 3.1% y/y and core inflation at 2.7% they are at the most since 2012.

Although the potential risks stand out on the hawkish side, economists think that BoE will not care about shaking the market. A high concentration on the topic of Brexit should also be noticed by the central bank and in such a situation it is justified to maintain a neutral attitude in anticipation of the development of accidents. Also for GBP, politics and the EU summit starting on Thursday (where "sufficient progress" will be announced in Brexit's negotiations) should be more important than the BoE decision.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market violated the technical support at the level of 1.3321, but bounced from the channel line support around the level of 1.3300. Despite the weakening of US Dollar across the board, the Pound bulls were not able to make a new local high. The local high was established at the level of 1.3452. The market conditions are neutral as the global investors await the BoE decision.