GBP-
Traders seem to be coming to their senses after going wild yesterday with 70% certainty of the BoE cutting rates in December. One inflation print is not sufficient to overturn a 7-2 vote share within the MPC and we could well have reached 4% come December, making all of this an exercise in futility.
Now traders seem to be reaching this conclusion, cutting their bets of a December cut and allowing the Pound to strengthen, slightly. Indeed, US inflation tomorrow is also expected to rise, yet everyone is still certain that the Fed will cut rates in both of their remaining meetings this year.
It is intriguing to see that despite UK inflation holding and US inflation likely to rise, both of the banks are having the opposite reaction to what we might consider Orthodox. In the US, because of politics and because of stubbornness in the UK.
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