Nov. 4 (Bloomberg) -- Sterling will probably rise tomorrow unless the Bank of England combines a cut in interest rates with an anticipated 50 billion-pound ($83 billion) increase in bond purchases, Societe Generale SA said.

“The only thing that could push it lower is if the bank goes the whole hog and does the 50 billion and cuts rates,” Societe Generale currency strategist Peter Frank said today in a phone interview from London. Without measures such as a cut in the U.K. deposit rate, the outcome of the Monetary Policy Committee meeting “is going to be bullish for sterling,” he added.

The pound rose against the dollar yesterday after dropping to an intraday low of $1.6263. It advanced again today to $1.6536 at 10:24 a.m. as a U.K. index of service industries rose in October to the highest level since the credit squeeze began in August 2007.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the pound compared with those on a gain, or the so-called net shorts, was 31,431 on Oct. 27 compared with 43,318 a week earlier, according to the Washington-based Commodity Futures Trading Commission.

“When the market’s really short what’s going to make it go further?” Frank said. “Because of the nature of the crisis it’s very hard to know what signal to follow.” The Bank of England decision tomorrow is “way more important than data right now.”

The Bank of England will extend its asset-purchase program, designed to revive the shrinking U.K. economy, by 50 billion pounds to 225 billion pounds, according to the median estimate of 48 economists in a Bloomberg survey.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

Last Updated: November 4, 2009 05:43 EST