Ahead of the interest rate announcement by the Bank of England, the British pound bounced back against its U.S., European and Swiss counterparts in European deals on Thursday. The pound thus recovered from a 2-day low against the euro and franc. On the other hand, the sterling extended its Asian session's downtrend against the Japanese yen.
Today, the Bank of England is expected to raise the size of its quantitative easing measures to GBP 225 billion to aid the ailing economy. Also, the central bank is set to maintain the key rate at a historic low. The announcement is due at 7.00 am ET.
At the end of its two-day rate setting meeting, the Monetary Policy Committee is widely expected to retain the official Bank Rate paid on commercial bank reserves at 0.5%. This has been the lowest rate since the central bank was established in 1694.
Economists expect the bank to announce an increase in the size of asset purchase scheme by GBP 50 billion following its current meeting. As on October 29, the central bank has purchased GBP 174.8 billion worth assets.
The British Chambers of Commerce urged the MPC to raise the QE measures immediately by at least GBP 200 billion, with the option of additional increases later on. David Kern, BCC's Chief Economist said, along with considering a negative interest rate on deposits held by commercial banks at the BoE, the MPC and the government need to consider other radical measures to boost lending.
The quantitative easing measures were first initiated on March 5 by launching GBP 75 billion asset purchase programme using central bank reserves. Later on, the measure was raised to GBP 125 billion on May 7 and then to GBP 175 billion on August 6.
Against the US dollar, the British pound gained ground after hitting a low of 1.6470 at 2:00 am ET Thursday. The pound-dollar pair is currently trading at 1.6544, compared to 1.6556 hit late New York Wednesday. The next upside target level for the pair is seen around 1.661.
U.K.'s sterling that closed Wednesday's North American session at 0.8980 against the European currency slipped to a 2-day low of 0.9002 at 1:50 am ET Thursday. Thereafter, the pound reversed its direction and is currently trading at 0.8976 against the euro with 0.892 seen as the next resistance level.
The Eurostat said in a report today that Eurozone retail sales declined 0.7% month-on-month in September, after falling 0.1% in August, revised from 0.2% drop estimated initially. Economists were looking for an increase of 0.2%.
Year-on-year, retail sales were down 3.6% in September, compared to a 2.3% fall in August, revised from 2.6% decline reported initially. Economists expected a decrease of 2.4%.
The British currency that declined to a 2-day low of 1.6781 against the Swiss franc at 2:10 am ET Thursday strengthened thereafter. The pound-franc pair is presently trading at 1.6837, compared to Wednesday's closing value of 1.6828. If the pair gains further, 1.695 is seen as the next target level.
Switzerland's consumer price index or CPI fell 0.8% year-on-year in October, the Federal Statistical Office said today. Economists had expected a decline of 0.7% following September's 0.9% fall. A year ago, inflation was 2.6% in October.
On a monthly basis, the CPI rose 0.6% after zero growth in September and slightly slower than a 0.7% rise expected.
Switzerland consumer confidence indicator increased to minus 14 in the fourth quarter from minus 39 in the third quarter, the State Secretariat for Economic Affairs or SECO said earlier today. The confidence indicator in the third quarter was revised from minus 42 reported initially. Economists expected the index to be minus 38.
Against the Japanese yen, the pound extended its Asian session downtrend during early European deals on Thursday. At 4:00 am ET, the sterling-yen pair declined to 148.60, compared to yesterday's closing value of 150.23. On the downside, 146.7 is seen as the next target level for the pair.
The minutes of the Bank of Japan's October meeting released today showed that there remains a degree of upside risk to the recovery of the emerging economies from the global slowdown
The minutes also indicated that the bank needs to continue to maintain the current accommodative conditions - while also making sure the markets are aware of that stance. A downtrend in process is expected to continue in the near term, the bank added.
Elsewhere, the Frankfurt-based European Central Bank is set to announce its decision at 7.45 am ET. The ECB is widely expected to to hold its key interest rate unchanged for the sixth straight month at 1%. The ECB is also set to continue its extraordinary measures for the time being, though calls for setting exit measures have strengthened.
The U.S. preliminary report on third quarter non-farm productivity and the weekly jobless claims report for the week ended October 31 have been slated for release in the North American session today.
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May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.