British Pound: BoE decision keeps November hike risk alive – MUFG
MUFG’s Derek Halpenny highlights that focus shifts to the Bank of England (BoE), where MUFG expects a hold today but sees rising odds of a November rate hike.
The British pound's future remains uncertain as the Bank of England (BoE) prepares to make a decision on November 2nd. MUFG analyst Derek Halpenny anticipates a hold on interest rates but sees an increasing likelihood of a rate hike in November. This hawkish stance could potentially bolster the pound's value, although MUFG doubts any significant upside before the UK budget on October 28th.
The focus now shifts to the BoE's monetary policy announcement, which will take place at 12 noon (BST). The article highlights the importance of monitoring energy markets, particularly natural gas prices, which have surged nearly 100% since early July. This fluctuation is expected to drive an OFGEM utility price cap increase in January, potentially pushing annual CPI above 4.0%, with August's CPI already exceeding the Bank's forecast at 3.1%.
MUFG believes the BoE will maintain its current stance, but with slightly less confidence than the market currently suggests, indicating a potential pre-emptive rate hike.
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