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Sterling extends gains as markets price more BoE tightening after GDP

Markets now assign an 89.2% probability of a November Bank of England hike and a terminal rate near 4.86%, following stronger UK GDP that is seen as confirming repricing already underway.

Reported · Written up by our desk · Central Banks

Sterling extended its rally after stronger UK GDP data, with Action Forex saying the move reflects Bank of England repricing that was already gaining traction before the report rather than being triggered by it.

Action Forex reported that markets are now pricing an 89.2% probability of a November BoE rate hike, alongside a terminal rate near 4.86%, as investors respond to earlier central bank signaling.

The outlet also linked the policy shift to pressure from persistently high energy prices that have been feeding inflation, noting that this same backdrop can later weigh on demand and tighten the policy trade space.

Action Forex added that the sequencing of BoE communication first, followed by GDP confirmation, matters for how durable the currency move is likely to be, and said Sterling is posting its broadest gains of the week.

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