GBP Sees Mixed Gains as UK Growth Supports November BoE Rate Hike
The British Pound (GBP) experienced mixed movements on Monday, gaining against the Euro but slipping against the US Dollar. Analysts at Pantheon Macroeconomics noted that resilient UK growth keeps a November interest-rate hike by the Bank of England (BoE) on track.
At the time of writing, GBP/EUR rose 0.19% to €1.1789, while GBP/USD dropped 0.19% to $1.3214. The Pound also saw gains against the New Zealand Dollar but fell against the Australian and Canadian Dollars.
Pantheon highlighted that September's final composite PMI fell to 52.0 from 52.5 in August, beating earlier forecasts. The services index was revised to 52.1 from 51.7, still indicating expansion. Pantheon's models suggest third-quarter GDP growth near 0.2%, potentially rising to 0.4% when adjusted for historical trends.
The fastest rise in services selling prices since May adds pressure on the BoE. Pantheon estimates underlying services inflation exceeding 4.5%, complicating the policy outlook. Despite this, fiscal uncertainty due to delayed tax decisions could weaken demand.