FX.co ★ BoE Expected to Hold Rates at 4%

The Bank of England is anticipated to maintain its key interest rate at 4% during its November meeting, as officials navigate between easing inflation and emerging signs of a slowing economy. In September, consumer price growth decelerated to 3.8%, which, although still nearly twice the targeted 2%, continues on a downward trajectory. Meanwhile, the wage and employment data indicate a weakening labor market. These factors have increased the likelihood of prospective rate cuts in the coming months. Investors are also assessing the potential effects of imminent fiscal tightening. Chancellor Rachel Reeves is expected to propose tax hikes and spending curbs in her November 26 budget to counteract high borrowing costs. Her recent pre-budget address highlighted the importance of fiscal discipline and stabilizing public finances. Amid uncertainties preceding the Autumn Budget, and as policymakers seek more definitive evidence of sustained reductions in price pressures, it is likely that the Bank of England will adopt a prudent "wait-and-see" approach before contemplating potential monetary easing.