Cable sits at 1.6515, down from the North American close Wednesday around 1.6555. The market now awaits the latest Bank of England rate decision. Rates almost certain to be kept on hold at 0.5%; it’s what the Bank decides on quantitative easing which holds the market’s attention.
A week ago I had no strong feeling as to what the Old Lady might do. As we’ve gotten closer to the day I’ve become increasingly convinced they’ll extend QE and if they”re going to extend they might as well do £50 bln as £25 bn. At the end of the day I just can’t get away from the truly awful Q-3 GDP data and my gut feeling that this country’s economy is in truly dire straits.
If I’m right re QE then sterling is rather vulnerable. There you go, another bit of classic British understatement.
UK data due:
09:30 GMT: Industrial production for September expected +1.2% m/m, -10.3% y/y, manufacturing production +1.0% m/m, -9.7% y/y.
12:00 GMT: Bank of England rate decision
