The British pound hovered around $1.34, its weakest level since late July, ahead of the Bank of England’s closely watched policy decision, as investors also assessed yesterday’s Federal Reserve rate increase. The BoE is widely expected to leave interest rates unchanged today, but markets will scrutinize any guidance on the future policy path. A rate hike in November remains priced in, though with reduced confidence as oil prices fall for a second straight session.
Even so, the outlook for the Middle East remains highly uncertain, keeping oil prices relatively elevated and complicating central banks’ efforts to tame inflation without unduly restraining economic activity. In the United States, the Federal Reserve raised interest rates by 25 basis points—the first increase since July 2023—and signaled the possibility of another hike later this year, as policymakers continue to confront stubborn inflationary pressures.
