For people that are buying or selling the Pound in the short term, their eyes are fixed on commentary coming from the Bank of England as any hints to monetary policy decisions could sway them to convert now or wait until after November 2nd.

In recent weeks forecasters have been suggesting that it is more than likely the Bank of England would raise interest rates to 0.5% however, in recent days the Pound has been falling in value as an interest rate hike could be off the cards.

UK inflation rate reaches 3%

UK inflation numbers were released Tuesday morning and showed a rise to 3%, which provided a small window for foreign currency buyers. However, the Governor of the Bank of England Mark Carney failed to impress the market with his speech shortly after, when he appeared to dodge questions about the likeliness of the Bank of England hiking the rate in November. Nevertheless, he did expect inflation to continue to rise.

Personally, I don’t believe the Bank of England will raise interest rates next month, as inflation has only increased by 0.1% and wage growth is continuing to lag behind the inflation numbers. Would the Central Bank really want to put further pressure on citizens pockets?

A report this week by The Resolution Foundation confirmed that the average UK pay is now at 2006 levels. Furthermore, Deputy Governor of the Bank of England Sir Dave Ramsden also confirmed his worry in regards to the wage growth numbers and insinuated he would not be looking to raise rates.

If my predictions materialise I expect the markets to be disappointed with the Bank of England as they have hyped an interest rate hike, but not delivered. I would expect Sterling to drop in value by a percent or two. But if my predictions are not correct a strong November for the Pound could be on the cards.