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2026-11-05 17:36:29
[Institutions: Bank of England Rate Hike Imminent, Sterling's Upside Limited] ⑴ Francesco Pesole of ING stated in a report that the Bank of England is expected to raise interest rates as anticipated on Thursday, providing continued support for the pound after its recent gains. ⑵ He noted that given the market has fully priced in another rate hike in February, the threshold for the central bank to exceed market expectations by sending strong signals about future tightening appears quite high. ⑶ This limits the pound's upside potential. ⑷ Given concerns about French debt, the pound has limited room to weaken against the euro in the near term. ⑸ However, Pesole stated that the short-term interest rate differential support for the pound against the dollar is weak, as UK interest rate expectations are more sensitive to falling oil prices. ⑹ Overall, the market has largely priced in the Bank of England's rate hike expectations, and further strengthening of the pound faces constraints.
