Wage growth is high, and that is only one reason for the BoE to keep rates at elevated levels. What will officials signal for 2025? How will GBP/USD react? Live covrage.
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Bank of England may follow Fed in hawkish stance
Britain pays – salaries are up 5.2%YoY in October, indicating more price pressures. While the core Consumer Price Index (core PCE) is off the highs, a 3.5% level in November is still too much for the Bank of England. It will most likely leave rates unchanged at 4.75% in its last meeting of the year.
The BoE has slashed borrowing costs twice but is now slowing down – an echo of the US Federal Reserve (Fed). GBP/USD tumbled after Fed Chair Jerome Powell conveyed a hawkish message, lifting the US Dollar.
A similar stance from the "Old Lady" – as the BoE is sometimes referred to – would help GBP/USD recover.
A large majority of the nine-strong Monetary Policy Committee (MPC) is set to support a no-change decision. Any significant dissent would weaken Sterling.
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