The Pound Sterling drifted close to a one-week trough against the US Dollar during London trade on Thursday as market players focus on the Bank of England meeting. Analysts largely expect that the BoE will maintain its key policy rate at the 0.75% level, and will be relatively quiet on the possible direction of future interest rates, at least until after the general election and the Brexit.
As of 10:44 am in London, the GBP/USD was trading higher at $1.2865, a gain of 0.0996%, and moving off the session low of $1.28368. The EUR/GBP is also higher at 0.8612 Pence, up 0.0302%; the pair has traded from a low of 0.86017 Pence to a high of 0.86205 Pence.
Outlook for UK Downgraded
Economists believe that the BoE will address the outlook by next year, though, as the signs have all been pointing to a weaker UK economy, As of now, markets believe there is a 55% likelihood of at least one rate cut of 25 basis points next year. Until recently, many economists had been forecasting that the UK central bank would be raising rates in 2020, but many have downgraded their outlook.