The British pound will be in for some action next week with an extremely heavy economic calendar. We are expecting UK consumer prices, labor market data, retail sales, third quarter GDP and the minutes for the most recent Bank of England meeting.
These reports will help to determine whether the Bank of England’s next move will be a rate hike or a rate cut. Based upon this week’s hawkish comments from central bank Governor King, the latter is more likely even though we think most of next week’s UK economic data will surprise to the downside. The strength of the pound should take its toll on consumer prices and the Bank of England minutes should express continued concerns about whether the BoE has done enough to calm their financial markets.
Written by Kathy Lien, Chief Currency Strategist for DailyFX.com