UK Inflation Falls Below 2% Target
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Daily Currency Update
UK inflation has fallen below the Bank of England's 2% target for the first time in three and a half years, signaling a potential shift in the economic outlook. According to the Office for National Statistics, the consumer price index (CPI) dropped to 1.7% in September, down from 2.2% in August.This decline could lead the Bank of England to reconsider its monetary policy, with interest rate cuts now more likely. Market expectations for a 25 basis point cut at the November meeting have risen to over 90%, which could weaken the pound as traders adjust to the potential shift in rate policy.
Key Movers
In the US, recent data indicating a resilient economy and slightly higher-than-expected inflation for September have led market traders to scale back expectations for a significant rate cut. Traders now assign a 92% probability of a 25 basis point cut at the Federal Reserve's policy meeting on November 7.Expected Ranges
- GBP/USD: 1.2935 - 1.3015 ▼
- GBP/EUR: 1.1885 - 1.1965 ▼
- GBP/AUD: 1.9375 - 1.9465 ▼
- EUR/USD: 1.0835 - 1.0905 ▼