Daily digest market moversPound Sterling gains even though BoE seems to cut interest rates

The Pound Sterling performs strongly against its major peers, except Asia-Pacific currencies, ahead of the Bank of England’s (BoE) monetary policy decision at 12:00 GMT. The BoE is expected to cut interest rates by 25 basis points (bps) to 4.75%, with a 7-2 vote split. The two divergent votes of the Monetary Policy Committee (MPC) are seen supporting leaving interest rates at the current levels.

This will be the second interest rate cut by the BoE this year. The BoE started reducing interest rates in August by cutting borrowing rates by 25 bps, but opted to keep them steady in September.

The press conference of BoE Governor Andrew Bailey after the policy decision will be interesting to watch. Bailey is expected to face a slew of questions regarding the impact on monetary policy and inflation from both Donald Trump’s victory in the US presidential election and the Autumn Forecast Statement presented last week.

According to the National Institute of Economic and Social Research (NIESR), the growth rate of the UK economy could be more than halved to 0.4% if Trump implements tariff hikes as he promised in the election campaign.