BoE to keep rates on hold tomorrow – ING

UK inflation for August was perfectly in line with consensus this morning. The figures confirm that the Bank of England should keep rates on hold tomorrow, notes ING currency analyst Francesco Pesole.

CPI figures confirm BoE will remain on hold

“This morning’s figures pretty much confirm that the Bank of England should keep rates on hold tomorrow. There is still a 6bp residual price cut for the meeting, however, suggesting a little more room for short-term Sonia swap rates to readjust higher after falling throughout September.

“GBP is trading on top after the CPI data and may find a bit more support tomorrow.”

“Today’s FOMC event may be a bigger event for the GBP markets. A 25bps cut may send GBP/USD back below 1.3100, but if Powell is as dovish as we expect, Cable may find good support before hitting recent lows of 1 ,3015.”