Home / Business and Economy / Pound Holds Firm as BoE Rate Hike Anticipation Builds
Pound Holds Firm as BoE Rate Hike Anticipation Builds
2 Nov
Summary
- Pound remained stable against dollar and euro.
- Bank of England expected to hike rates this Thursday.
- Inflation projected to surpass 4% early next year.
As of November 2, 2026, the pound demonstrated stability against both the US dollar and the euro. Investor focus has shifted from the previous week's UK budget announcement to an eagerly awaited Bank of England (BoE) interest rate decision scheduled for Thursday. This is anticipated to be the BoE's first rate increase since August 2023.
While other major central banks have already implemented rate hikes to curb inflation driven by elevated energy prices, the BoE has maintained a cautious stance. However, escalating energy costs and projected inflation, expected to rise above 4% early in the following year from the current 3.5%, are pressuring the central bank to act. Brent crude futures, though down from recent highs, remain significantly above pre-conflict levels.
Market expectations suggest a potential follow-up rate hike in February, though current pricing for BoE rate increases appears aggressive, with money markets fully anticipating four 25-basis-point hikes by September 2027. The recent UK budget presented by Finance Minister John Healey did not introduce any market-moving surprises.
