FXStreet reported that sterling traded near $1.34 Friday, while separate market pricing showed a high probability of a Bank of England rate rise at its next decision on Nov. 5.
FXStreet's snapshot at 11:53 a.m. ET (15:53 UTC) on Friday, Oct. 30, put GBP/USD at 1.3400, up 0.19%. RateProbability's overnight-index-swap dashboard showed a 94.4% implied chance of a 25-basis-point increase in a reading on Oct. 30. That probability reflects market pricing, not a central-bank decision.
The Bank of England's Monetary Policy Committee voted 6-3 to hold Bank Rate at 3.75% at a meeting that ended Sept. 16. The three dissenters favored a quarter-point increase to 4%. The Bank's minutes connected the inflation outlook to energy-market volatility during the Middle East conflict. They recorded U.K. CPI at 3.1% for August and said inflation could rise further over coming quarters.
The Federal Reserve (Fed) held its target range at 3.75%-4.00% on Oct. 28 in a 10-2 vote. Lisa D. Cook and Beth M. Hammack preferred a 25-basis-point increase. The Bureau of Economic Analysis (BEA) said U.S. real GDP rose 0.8% from the second to the third quarter, equivalent to 3.4% annualized growth. The BEA also reported that core personal consumption expenditures (PCE) prices were 3.1% above their year-earlier level in September and rose 0.3% from August.
FXStreet, citing Prime Terminal, reported that market odds of a December Fed increase fell to 70% Friday from about 84% after the Oct. 28 decision. Those figures are market estimates, not Fed guidance.
The BoE says a higher Bank Rate typically raises borrowing costs and savings returns, so borrowers may pay more while savers may receive more. EconoTimes previously reported Brown Brothers Harriman’s expectation of a Nov. 5 Bank of England rate increase. The Bank's next rate decision is scheduled for Nov. 5.
