Today’s interest rate decision from the Bank of England looks as close to a done deal as you’ll find in currency markets. As of yesterday afternoon, the implied likelihood of a quarter-point cut, which would take rates near a three-year low of 3.75%, sat at around 99%.
Sterling felt the brunt of those shifting probabilities yesterday, weakening sharply against the US dollar and the euro in the wake of markedly cooler inflation data before stabilising in the afternoon. The risk is that it has further to fall should the Bank indeed cut rates, particularly if the voting leans more dovish than expected.
The European Central Bank (ECB) will also gather in Brussels to vote on interest rates this afternoon. That meeting has received less column inches than the Bank’s owing to the fact it seems similarly likely that the ECB will keep rates on hold and make a dash for Christmas.
Five years after being axed by Boris Johnson, UK government officials have agreed to pay £570 million to join the Erasmus + student exchange scheme. The prime minister justified the cost by saying it was “money coming back” to the country.
The other big news from these shores was the last-ditch efforts to force former Chelsea FC owner Roman Abramovich to divert the proceeds of the sale to a Ukraine reconstruction fund. The £2.5 billion sale price has been held in a frozen bank account since 2022.
Germany company expectations of future conditions soured this month, with the Ifo business climate index recording an unexpected fall to a seven-month low of 87.6.
Brent crude oil futures soared by almost two per cent on Wednesday as Donald Trump announced a partial naval blockade of Venezuela. As of Wednesday afternoon, Brent was trading closing to $60 per barrel, which is still close to a four-year low.
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