GBP started a decline. Overview for 09.11.2023

The British pound sterling fell against the US dollar for the third consecutive session. The current GBPUSD exchange rate stands at 1.2286.

The pound intensified its decline when the Bank of England's chief economist suggested interest rate cuts by mid-2024. The speaker was Huw Pill, and he said future rate cuts do not seem unreasonable to him.

Earlier, Bank of England Governor Andrew Bailey noted it was too soon to talk about a likely cut in interest rates. However, Bailey is confident that inflation will return to the target level of 2% by the end of 2025.

Market expectations for interest rates could indeed change. Investors are currently forecasting a 25-basis point reduction in the cost of borrowing next August. The postponement of a rate cut, even if theoretical, has put pressure on the already uncertain pound.