GBP/USD Hits Six-Week Low Ahead of BoE Rate Decision
The GBP/USD currency pair has hit a six-week low following the hawkish Federal Reserve rate hike, which lifted the US dollar to its highest level in six weeks. The Bank of England's interest rate decision is scheduled for today at 12:00 BST.
The central bank is expected to maintain its current interest rate of 3.75%, but officials are setting the stage for a potential hike in November, which could be the first of several. This comes as inflation has risen to 3.1%, but service sector inflation and underlying inflation remained unchanged in August.
The labour market is weakening, helping to offset some of the inflationary pressures stemming from the Middle East conflict. The question remains how long the Bank of England can maintain this stance, given rising oil and gas prices that are now above the adverse scenario set out by the central bank in July.