Daily digest market movers: Pound Sterling to be influenced by UK monthly GDP for August
- The Pound Sterling exhibits a mixed performance against its major peers on Thursday. The British currency is expected to remain on edge, with investors focusing on the United Kingdom's (UK) monthly Gross Domestic Product (GDP) and the factory data for August, which will be released on Friday.
- The UK economy is estimated to have expanded by 0.2% after remaining flat in July. The monthly Industrial, and Manufacturing production are expected to have grown by 0.2% after contracting in July. Signs of revival in activities in the manufacturing sector would improve the economic outlook, which will have a positive impact on the Pound Sterling.
- Meanwhile, the major trigger for the Pound Sterling will be market expectations for the Bank of England’s (BoE) outlook for the last quarter of the year. The BoE is expected to cut interest rates by 25 bps in one of the remaining two meetings in November or December. Traders have raised bets for rate cuts in November after last week’s speech from BoE Governor Andrew Bailey, in which he guided for an aggressive policy-easing cycle if price pressures ease further.
- BoE officials have remained worried about high inflation in the services sector due to robust wage growth. UK annual service inflation rose sharply to 5.6% in August from 5.2% in July.
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