UNITED KINGDOM

UNITED KINGDOM

GVI Bank of England Policy Meeting Preview Decision: July 11, 2008 at 12:00 GMT. BOE Repo Rate: 5.00% Expected Decision: No change. BOE policy makers continue to balance concerns about inflation against the risk of a slowing economy. Note below that both the U.K. Manufacturing and Services PMIs have turned south. Inflation data are a worry and will prevent any ease in the near future. BANK OF ENGLAND Policy Objective: The Bank's monetary policy objective is to deliver price stability, low inflation, and, subject to that, to support the Government's economic objectives including those for growth and employment. Price stability is defined by the Government's inflation target of 2%. The chart above shows year/year CPI for the U.K. relative to its 2% target for this key price index.

The chart above shows the current three month libor rate, the current Repo Rate and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago. The chart provides a view on where the markets feel U.K. interest rates are headed.

The chart above shows the U.K. repo rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

The Swiss National Bank tries to maintain a stable relationship of the CHF vs. the EUR. It is never pleased with weakness of the CHF against the EUR and could raise rates in response to an ECB policy tightening.