UK Inflation Weakens Pound, Heightens Odds for BoE Rate Cut by Year-End

The cooler-than-expected UK inflation data is weakening the pound sterling, raising expectations for a Bank of England rate cut by year-end amidst easing US credit market concerns.

• The September UK inflation reading revealed a lower-than-expected Consumer price index, signaling potential dovish action from the Bank of England.
• As the pound sterling faces downside risks, analysts predict an increased likelihood of a rate cut by the Bank of England before the end of the year.
• Meanwhile, the United States dollar remains strong as concerns in the US credit market ease, although sustaining further gains may prove challenging.