In early trading on Wednesday, the British pound jumped to new multi-day highs against the currencies of US, Europe and Switzerland. But the pound eased from a 5-day high against the yen.
The Bank of England's Monetary Policy Committee member, Timothy Besley said yesterday that considerable decrease in commodity prices and the substantial weakening in demand imply that the upside risks to inflation diminished significantly.
Credit market conditions would possibly remain tight ahead of the full effects of recent government measures working their way through to the terms faced by borrowers. "It is now less likely that the rebalancing process for the U.K. will be as gentle as thought one year ago," Besley stated.
He said the MPC will set an appropriate level of Bank Rate in the light of current economic conditions, but with a focus on the prospects for inflation in the medium term.
Rise in energy and food prices reduced real take home pay and pushed annual consumer price inflation to 5.2%. Meanwhile, the economy contracted 0.5% in the third quarter after stagnating in the second quarter.
The British pound, which closed yesterday's trading at 1.8432 against the Swiss franc rose to 1.8649 in early deals on Wednesday. This set a 5-day high for pound. On the upside, 1.992 is seen as the next target level for the pound-franc pair.
During early trading on Wednesday, the UK currency climbed to a 5-day high of 1.6219 against the dollar. This may be compared to Tuesday's close of 1.5895. If the pound-dollar pair advances further, it may likely target the 1.633 level.
Against the euro, the pound strengthened to a 6-day high of 0.7886 in early deals on Wednesday. The next upside target level for the UK currency is seen at 0.77. The euro-pound pair was worth 0.7987 at Tuesday's close.
The pound declined against the yen after hitting a 5-day high of 159.58 at 6:00 pm ET Tuesday. Currently, the pound-yen pair is worth 155.54, down from yesterday's close of 155.98. If the pair weakens further, it may test support around the 140.7 level.
Looking ahead, the Bank of England is scheduled to issue the mortgage approvals data at 4:30 am ET. The number of mortgage approvals is expected to remain at 32,000 in September. Meanwhile, net consumer credit growth is seen at GBP1 billion and secured lending growth at GBP0.8 billion in September.
A final M4 money supply report is also due at the same time. According to the preliminary estimate, UK's M4 money supply grew 1.4% month-on-month and rose 12.2% annually in September.
Turning to the US, the durable goods orders report for September has been slated for release in the New York morning.
The Federal Open Market Committee is scheduled to meet today to decide on interest rate. The Fed is due to announce its interest rate decision at 2:15 pm ET. Most economists expect the Fed to reduce the interest rate by 50 basis points from the current rate of 1.5%.
At its regularly scheduled August meeting, the Fed left the fed funds target rate unchanged at 2%, in-line with expectations. Dallas Fed President Richard Fisher cast the only dissenting vote against the decision to pause. The post-meeting policy statement relayed a balanced outlook on growth and inflation, but it did not provide much clarity on the future rate outlook. On October 8th, the Fed slashed interest rated by 50 basis points to 1.5% in a coordinated move with the other major central banks.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.