Agency: The Bank of England is expected to resume interest rate hikes, limiting the upside for the pound

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智通财经2026/11/05 10:08

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ING’s Francesco Pesole stated that the Bank of England is expected to raise interest rates by 25 basis points to 4.0% on Thursday, in line with market expectations and consensus.
The likelihood of household energy bills rising by about 25% next January has increased, and overall inflation is expected to peak slightly above 4% at the start of next year, which is widely seen as the Bank of England’s pain threshold.
However, there is still limited evidence of second-round inflation effects.
The institution forecasts a 7-2 vote in favor of raising rates and believes the Bank of England will not commit to further tightening at this stage.
A follow-up rate hike in February remains the base case, but policymakers should continue to emphasize actual evidence of energy’s transmission into wages and prices.
If the Bank sends a clear signal of further rate increases, it would be considered a hawkish surprise.
The institution believes Thursday's rate hike could validate the recent rally in the pound in the short term.
However, the February hike has already been fully priced in, and the threshold for a hawkish surprise to boost the pound appears rather high.
EUR/GBP is suppressed by French factors, with no immediate rebound potential.
GBP/USD faces a less favorable short-term rate differential since the pound yield curve displays greater dovish flexibility when oil prices decline.
The institution currently expects EUR/GBP to stabilize near 0.8400, and the pound’s recent upside against the dollar might be limited to 1.3500.
Overall, market expectations for a Bank of England rate hike have already been fully priced in, limiting further strengthening of the pound.

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Agency: The Bank of England is expected to resume interest rate hikes, limiting the upside for the pound

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