Pound Jumps as Traders Turn Cautious on Expectations of BOE Jolt
- Derivatives trading shows 98% chance of rate cut on Aug. 4
- ‘High expectations’ make ‘higher hurdle’ for BOE: BTMU
Would a BOE Rate Cut Prevent a Recession?
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The pound advanced before the Bank of England on Thursday delivers its second post-Brexit interest-rate decision, as some investors see a risk of policy makers underwhelming a market that’s pricing in the near certainty of a rate reduction.
Sterling rose the most in two weeks even after a report Tuesday showed U.K. construction contracted the most in July since the financial crisis. With swaps prices indicating a 98 percent chance of a cut Aug. 4 and speculative investors being the most bearish on the pound in records going back to 1992, sterling is seen as subject to policy disappointments.