All eyes are on the Bank of England, which is widely expected to hold interest rates steady. The decision reflects the BoE’s cautious approach to balance inflationary pressures to support continued economic growth.
UK inflation came is as anticipated at 2.2 percent; however still remains marginally above the Bank’s target level of 2 percent.
GBPEUR is trading close to its highest level since July after UK core inflation rose across the board, signalling the BoE’s battle with inflation is not over.
Pound Sterling has benefitted leading up to the monetary policy decision at midday, pushing up against the other currencies in the G10 as markets now pencil in a 25-basis point rate cut in November.
Investors will watch out for the comments that follow from the policymakers to understand their thoughts on future rate cuts and how the UK economy is fairing.
GBP/USD has hit a fresh two year high after the Federal Reserve reduced interest rates, markets were divided over a 25 or 50-basis point rate cut however the Fed went with the latter. Over the last 6 months, GBP/USD has jumper over 4.50 percent.
This presents a great opportunity to secure GBP/USD on a forward facility whilst the rate remains at its highest level this year – protecting your business from potential market declines and rate fluctuations.
For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.