The British pound sterling is saving strength for daily movements against the US dollar. The current GBPUSD quote is 1.2760.
Today the key event is the meeting of the Bank of England. The interest rate is expected to rise by 25 basis points to 4.75% per annum. Furthermore, financial markets see the probability of an interest rate hike up to 5%. This possibility is estimated at 40%, which is not that little to ignore such a scenario.
The UK inflation statistics published yesterday showed that the country has also seen an increase in the cost of mortgage loans. This is another pro-inflation signal.
In fact, investors only need BoE’s comments on its future steps. The interest rate is likely to be raised at least once more, whereupon the Central Bank will be willing to assess the cumulative effect. Any signals that the Bank of England will continue to tighten monetary policy will support the position of the GBP.