The British pound demonstrated a small increase against the dollar during Wednesday because market participants expected important labor market statistics to impact Bank of England interest rate decisions. The currency increased 0.05% to $1.3390 while maintaining its position near a three-week low and experiencing a decline against the euro.
The June inflation rate of 3.6% represents the highest level since last year but economists predict no quick rate cuts unless job market indicators deteriorate. ING strategist Francesco Pesole stated that the threshold for a steep rate cut remains high.
The market predicts an 80% chance of a 25 basis-point interest rate reduction in August while deeper rate cuts are expected to occur by mid-2026. The Bank of England will observe Thursday’s employment statistics to determine its upcoming monetary policy decision.
