The British pound strengthened toward $1.30, rebounding from a two-and-a-half-month low, as investors focused on the Bank of England’s upcoming interest rate decision on Thursday.
Pound rises toward $1.30 ahead of BoE decision
Markets are currently pricing in a 91% likelihood of a quarter-point rate cut, though they expect fewer cuts next year than projections before last week’s budget.
The Office for Budget Responsibility recently adjusted its 2025 inflation forecast to an average of 2.6% from the 1.5% projected in March.
This aligns with the BoE’s August forecast, which anticipates inflation at 2.4% in one year, 1.7% in two years, and 1.5% in three years. Meanwhile, Finance Minister Rachel Reeves announced £40 billion ($51.84 billion) in tax increases and higher borrowing on October 30.
