The Bank of England is expected to leave interest rates unchanged at 5.75 percent and unlike the ECB, when they do not tinker with interest rates, there are no comments made.
Economic data has been hot and this will continue to buy the Bank of England time even though they too are becoming increasingly concerned with the moves in the bond markets. Three month sterling rates jumped to an 8.5 year high, raising speculation that the Bank of England may have to inject liquidity into the financial markets if borrowing costs continue to rise. Like the manufacturing and construction sector ISM reports, service sector ISM in August was particularly strong.
Written by Kathy Lien, Chief Currency Strategist of DailyFX.com