The pound rises to a four-week high, with attention on UK CPI and budget risks.

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智通财经2026/10/20 14:06

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The British pound rose to a near 4-week high on Tuesday, just below 1.34, boosted by stronger-than-expected UK employment and wage data, further solidifying market expectations of a rate hike at the Bank of England's November 5 meeting.
Market attention has shifted to Wednesday's release of the UK Consumer Price Index, with consensus expecting both headline and core CPI to rise year-on-year, providing further support for a rate hike next month.
The main potential variable before the Bank of England's decision is the Autumn Budget to be released on October 28. Stronger employment and wages could push inflation higher, necessitating a rate hike, but higher rates could also increase financial pressure on UK residents.
If the Labour government adopts a more accommodative stance to ease the burden, market concerns may prompt bond investors to sell UK government bonds again, putting downward pressure on GBP/USD.
Institutional views suggest that unless Wednesday's UK inflation data shows a significant downside surprise, GBP/USD is expected to hold support; the converging global inflation outlook and the unwinding of previous USD long positions accumulated due to the Federal Reserve's hawkishness and European fiscal turmoil both favor the pound.

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The pound rises to a four-week high, with attention on UK CPI and budget risks.

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