The GBP is set to be volatile this week with the Bank of England (BOE) Interest Rate Decision Meeting. The market is prepared for 50 bps hike bringing the cash rate to 1.75%. Not only is the largest increase this year but also since February 1995. Along with this news, inflation is expected to rise to be over 9% and slightly over 11% in October. This means big things for the GBP.
On the other hand, the Reserve Bank of Australia (RBA) is expected to hike rates by an additional 50 bps bringing the cash rate to 1.85%. Although the RBA has already hiked rates multiple times this year, the central bank is prepared to continue to do so to ensure that inflation returns to acceptable levels.
There are various interesting and contributing factors that these central banks are willing to pursue to continue to combat inflation, however it will be interesting to see how these decisions will affect the GBP/AUD. Please see the following link to learn about additional methods, central banks have taken note of that might be affecting inflation and note that all trading carries risk: