The British pound is hovering around $1.318 as market participants keenly anticipate upcoming economic data releases. The Bank of England recently held interest rates steady, though the close vote suggests a potential shift in policy. Markets are currently leaning towards a rate cut in December, and the upcoming employment report and GDP figures will be crucial in shaping expectations. The UK economic outlook remains uncertain, with a potential slowdown in growth and a rise in unemployment on the horizon.
- The British pound is trading around $1.318.
- The Bank of England’s recent decision to hold interest rates was narrowly decided (5-4).
- Markets are focused on the December meeting and pricing in a rate cut.
- Tuesday’s employment report and Thursday’s flash Q3 GDP data are crucial.
- Q3 GDP is expected to show a 0.2% growth, a third consecutive slowdown.
- Unemployment is forecast to rise to 4.9%, the highest since May 2021.
- Wage growth is expected to ease to 4.9% year-on-year.
- Investors are awaiting the Finance Minister’s late November budget, with speculation of tax hikes.
The information suggests a period of uncertainty for the British pound. Economic data releases in the near future will be highly influential, potentially pushing the Bank of England towards a more dovish stance. Weaker growth and rising unemployment could increase the likelihood of a rate cut, which would typically weaken the currency. The upcoming budget announcement also introduces a potential source of volatility, especially if it includes unexpected tax measures.