The Bank of England is widely expected to raise its benchmark interest rate to 4% from 3.75%, its first move since the end of last year and its first tightening since 2023. Markets are fully pricing in the hike, and economists are unanimous in forecasting it, so the decision itself is of least interest to traders.
Attention is instead focused on what the central bank says about inflation and growth, and on any hints about its next move. Traders still cannot settle on December, and since late yesterday a fourth hike by the end of 2027 is no longer fully priced in. Tom Rees notes that the central bank's new inflation gauge for the underlying rate shows little sign of building price pressures so far, and a significant focus on this in tomorrow's minutes could calm hiking expectations further.
Elsewhere, Next kept its pretax profit guidance intact but lifted its full-year sales guidance after third-quarter sales rose 8.1% from a year earlier, driven by its international business. UK growth slowed, with price sales up 2.0%, as unseasonably warm weather hurt September sales. The retailer also flagged new EU tariffs, which it expects to add around £5 million to its costs this year.
Brent crude fell below $100 for the first time in almost a month, adding to a global bond rally, while the Democrat election sweep and the positive market reaction to it caught many by surprise.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing