Pound climbs on a weaker Dollar and a UK growth surprise

• GBP/USD climbs through 1.3250 to its highest level since October 6.
• 54 of 63 economists polled now expect a BoE hike to 4.00% in November.
• BoE Governor Bailey is in Bangkok on Friday, and UK inflation is due October 21.

A weaker Dollar gave GBP/USD the first part of its climb, and a run of UK news gave it the rest. The pair rose through 1.3250 to its highest since October 6, and its only real setback came on the US releases.

The UK economy grew 0.1% in August against a forecast 0.1% contraction, with factory output up 1.2% where a 0.1% fall was forecast, and GBP/USD barely moved on the release. It has climbed since while EUR/USD has been nearly flat, which makes that part of the gain the Pound's own and has taken EUR/GBP back below 0.8450.

Of 63 economists polled October 12-14, 54 now expect the Bank of England (BoE) to lift the UK's Bank Rate to 4.00% in November. A month earlier, about nine in ten expected no move for the rest of 2026. A hike would put the UK back level with the top of the Fed's 3.75%-4.00% range and erase the gap the Fed's September 16 hike opened in the Dollar's favour.

On the calendar

BoE Governor Bailey speaks in Bangkok at 02:00 GMT on Friday, with Fed Chair Warsh following there at 03:30 GMT in his last scheduled appearance before the Fed's October 28 decision. A BoE hike on November 5 is almost fully priced, and traders put the Fed's next hike in December.

UK jobs figures are due at 06:00 GMT on Tuesday, October 20, after a 4.9% unemployment rate in the last release. September inflation follows at 06:00 GMT on Wednesday, October 21, after 3.1% in August. Retail sales at 06:00 GMT and the business surveys at 08:30 GMT come on Friday, October 23, all before the BoE's November 5 decision.

On the charts

Thursday's bar runs from near the bottom of the 1.3200-1.3300 range GBP/USD has held since September 24 to near its top. Wednesday's 11-month low just under 1.3150 is the deepest point of the slide from just under 1.3700 on August 21, and Thursday's high has made back roughly a quarter of it. The 50-day Exponential Moving Average (EMA) is near 1.3350, above the whole range.

GBP/USD daily chart