GBP/USD Edges Higher Amid Scaled-Back Rate Hike Expectations
The GBP/USD pair has edged higher to 1.3371 on Tuesday, but market expectations of a Bank of England rate hike have scaled back following the decline in oil prices.
Brent crude fell to $100 per barrel after Donald Trump left open the possibility of a diplomatic solution with Iran, and an increase in regional oil supplies added to the downward pressure on prices.
The Bank of England officials stressed last week that the outlook for inflation and interest rates will largely depend on oil and gas prices in the coming months. Markets now estimate the probability of a Bank of England rate hike in November at approximately 80%, and that of another increase before year-end at around 56%.
The UK autumn Budget is also gaining attention, with media reports suggesting the government may extend the new property tax to homes worth more than $1.5 million.