Pound weakens below $1.35 ahead of Fed and BoE
Sterling fell below $1.35, a low since mid-August, as the dollar stayed supported ahead of a widely expected Fed rate hike; the BoE is expected to hold rates.
35, touching its lowest level since mid-August, as the dollar remained supported ahead of a widely expected Federal Reserve rate hike on Wednesday, while the Bank of England is expected to hold rates on Thursday. BoE Governor Andrew Bailey has pushed back against expectations of another imminent rate hike, but surging energy prices have clouded the inflation outlook, with oil climbing well above $100 a barrel amid renewed Middle East hostilities. Earlier this month, data showed the UK economy expanded at its fastest pace in 18 months in July, supported by AI-related activity and continued momentum from a strong first half.
75% on Thursday, before delivering a 25-bp hike in November as inflation persists and growth holds up. Markets, meanwhile, are pricing in four BoE rate hikes by mid-2027.