With U.K. inflation higher in September, the Bank of England (BoE) faces a Thursday decision that a Reuters poll of economists expects to lift Bank Rate from 3.75% to 4%.
The Office for National Statistics (ONS) said consumer prices were 3.5% higher than a year earlier in September, compared with 3.1% in August. Transport prices had the strongest upward effect on the change in the annual rate, with motor fuels a major factor, the agency said. The September figure was above the BoE's 2% inflation target.
At its September meeting, the BoE's Monetary Policy Committee kept Bank Rate at 3.75%. Six members backed holding it, while three supported a 0.25-percentage-point increase to 4%. The Bank's minutes linked inflation uncertainty to higher, more volatile energy prices associated with the conflict. They also said households and businesses had faced higher rates since the conflict began.
Investors' expectations extend beyond this week's meeting. Reuters reported that market pricing pointed to three or four more quarter-point increases in 2027, potentially taking Bank Rate to 4.75%-5%. Economists in the Reuters poll had no shared view on whether increases would continue beyond November. Alexander Harvey, a UK economist at Oxford Economics, told Reuters he did not expect Bank Rate to reach the level markets had priced in. The poll and market pricing describe expectations, not a BoE decision.
FXStreet reported sterling around $1.3390 during Monday's Asian session in a report timestamped 9:15 p.m. ET Sunday (02:15 GMT Monday). EconoTimes has previously covered sterling trading near $1.34 while markets priced in a Bank of England increase.
The BoE's published calendar lists the decision for 7 a.m. ET (12:00 GMT) Thursday, Nov. 5. Bank of England Gov. Andrew Bailey and some of his deputies are scheduled to hold a news conference at 7:30 a.m. ET (12:30 GMT), Reuters reported. The Bureau of Labor Statistics (BLS) has scheduled its October Employment Situation report for 8:30 a.m. ET (13:30 GMT) Friday, Nov. 6.
