British Pound: Resilience draws support from BoE rate hike prospects – MUFG

Further near-term gains for the Pound are seen as likely as firmer UK activity, employment and inflation data lend support. Against this backdrop, MUFG’s Lee Hardman expects the BoE’s rate-hiking cycle to begin in November. September’s headline CPI rose to 3.5%, while MUFG forecasts inflation above 4.0% next year following the energy price cap reset.

Can Stronger UK Data Drive Further Pound Gains?

"We continue to expect the BoE to begin their hiking cycle in November after recent stronger economic data for both activity and employment alongside comments from BoE officials including Governor Bailey."

"The release of the latest UK CPI report this morning should seal the deal for a hike next month."

"The report revealed that headline inflation jumped to 3.5% in September up from 3.1% in August."

"We expect inflation to pick up further rising above 4.0% next year once the energy price cap is reset higher again."

"The latest developments remain favourable for the pound to strengthen further in the near-term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)