The Bank of England will announce on Thursday whether it is halting a run of interest rate hikes that stretches back to December 2021, a day after signs that it had turned a corner in tackling Britain's high inflation problem. Investors piled into bets on the BoE keeping Bank Rate at 5.25% on Wednesday as soon as official data showed a surprise fall in the pace of price growth. Goldman Sachs and other banks ditched their previous calls for one more rate increase and investors put a roughly 50% chance on a pause by the BoE, up from just 20% on Tuesday.
The U.S. dollar index, which measures the currency against a basket of rivals, was 0.076% lower at 105.04, after having been as low as 104.66 earlier in the session.
Traders cut their bets on a
continuing rally in the pound by the most since mid-June ahead
of a Bank of England rate decision on Thursday, after inflation
slowed more than expected last month. .