Pound Sterling rises against its major peers

The Pound Sterling performs strongly against its major peers at the start of the week, with investors also focusing on the Bank of England’s (BoE) monetary policy decision, which will be announced on Thursday.

The BoE is expected to cut interest rates by 25 basis points (bps) to 4.75%. Out of the nine-member led Monetary Policy Committee (MPC), seven members are expected to vote in favor of a rate reduction, while two are expected to support leaving interest rates unchanged at 5%. BoE external MPC member Catherine Mann is likely to be one of those who would support keeping rates stable.

Investors will pay close attention to BoE Governor Andrew Bailey’s press conference after the policy decision to get fresh guidance for the policy action in December. Market participants will also seek clues about how the BoE assessesAnnual Forecast Statement presented by the Labour government, particularly of how it could influence the interest rate path for the next year and the inflation outlook.

UK Chancellor of the Exchequer announced 40 billion pounds worth of taxes, the highest since 1993, and a slew of investment projects to revive public spending. Reeves also announced that the Office for Business Responsibility (OBR) raised current-year inflation targets to 2.5% from the 2.2% projected in March.