Anaemic economic growth and stagnant inflationary pressures in the UK will most likely incentivize BoE policy makers to keep policy rates intact for another meeting according to the majority of pollsters, projecting that the bank will await for additional data before unloading more easing measures.
Softer data on inflation, growth and employment compared to August projections may tilt the voting scale however and nudge the committee to favour a cut. Downside surprises on all the categories above, do add credibility for a rate reduction, yet the steady and careful approach reiterated time and time again from the bank may be honoured once more.
Furthermore, some analysts on the fringes have gone the extra mile and entertained the thought that the BoE will add in the equation the impact of Chancelor’s Reeve budget, speculating that its austere nature will undoubtedly be contractionary for the UK economy, which would add an extra shade of dovishness.
Reuter’s GBP OIS predictions for the time being showcase a unanimous expectation for BoE holding rates steady, whereas some forecasters from prominent banks dilute the odds, assigning a 75% chance for a pause scenario at the 4% level, whereas the remaining 25% falls in favour for a 25bps cut scenario, which will drive the overnight borrowing rate to 3.75% if it materializes.
Commentary from BoE Governor Bailey for Chancelor’s Reeves Autumn Budget will also be of great importance for traders as they will get a glimpse into the coordinated efforts (if any) of the central bank and the government efforts at fixing the situation in the Kingdom. The official announcement from 11 Downing Street is scheduled for the 26th of November of 2025.
Technical Analysis
GBPUSD Chart The British Pound finds support near $1.30 against the greenback ahead of BoE decision
Resistance: 1.3160 (R1), 1.3300 (R2), 1.3450 (R3)
Support: 1.3000 (S1), 1.2860 (S2), 1.2720 (S3)