Sterling remains on the back foot following last week’s revelation from the Bank of England (BoE) that we could see a further cut in interest rates as early as in November. The economic data from the UK has been mixed in the last couple of weeks. Economist are still fairly ‘dovish’ on the prospects for growth as uncertainty continues to muddy the water.
The rebound in housing prices continued this morning. Rightmove stated that the average asking price rose 0.7%, or £2,277, in September. This follows the doom and gloom seen in July following the outcome of the infamous Brexit referendum. This has taken the average cost for a home across England and Wales to £306,499. However, house prices are still at a deficit compared to the drop that we saw before the referendum.
The UK’s calendar of data releases is fairly light this week. The biggest price risk to the UK will be on Wednesday evening as the US Federal Open Market Committee meets to discuss the prospects of interest rates, with the some investors believing they could increase interest rates. As the world’s largest economy, any action that the US central banks takes here could have an effect on currency rates. Meanwhile the biggest domestic risk will be on Thursday when BoE Governor Mark Carney speaks. He is due to deliver an Arthur Burns Memorial Lecture in Berlin.