A 25bp UK base rate hike to 5.0% next month (November 9) now appears a nailed-on certainty--despite expected opposition from ultra-dove David Blanchflower, following the October 4/5 MPC minutes disclosure that Andrew Sentance and Tim Besley voted for a 25bp rise earlier this month (BoE website).
Sentance was making his MPC debut. Besley joined the MPC in September. GBP/USD once again ran into resistance ahead of touted offers at 1.8740 in a knee-jerk reaction to the MPC minutes release. Sterling previously ran into a wall pre-1.8740 in early European trade. 1.8737 was yesterday's high. Cable bids are tipped at 1.8690/95 (1.8694 was today's Asian session base), with some stops noted below 1.8690. Further demand is pegged at 1.8650.
US September CPI and housing starts are due at 12:30GMT. Core CPI forecast +0.2% m/m, +2.9% y/y. Headline: down 0.3% m/m. Housing starts forecast: 1640k. UK September retail sales figures are due at 08:30GMT tomorrow. Forecast: +0.4% m/m, +4.1% y/y. Friday will see the preliminary estimate of UK Q3 GDP. Forecast: +0.6% q/q, +2.7% y/y.
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