Sterling no Longer Likely to Fall as BOE Looks Set to Raise Rates

Dow Jones10-09 17:23

0923 GMT - The Bank of England is likely to raise interest rates in November followed by another increase in February, preventing sterling from falling, Commerzbank's Volkmar Baur says in a note. "The U.K. economy has remained relatively resilient so far this year." This supports the case for raising rates given recent stickier-than-anticipated inflation, he says. The market is pricing two rate increases by February so the potential tightening might not have much impact on sterling. However, Commerzbank had previously expected sterling to weaken towards year-end and now expects it to trade sideways versus the euro in coming months. The euro rises 0.1% to 0.8478 pounds, having reached a 16-month low of 0.8445 Wednesday, LSEG data show.

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