19.03.202608:07:10UTC+00Pound Steady Ahead of BoE Decision

The British pound hovered around $1.327 on Thursday as investors weighed surging energy costs against weaker-than-expected UK wage growth, just hours before the Bank of England’s interest rate decision. European natural gas prices jumped 25% following attacks on key LNG facilities in Qatar, while Brent crude climbed to $114 per barrel, intensifying inflationary pressures on the UK economy.

These developments have led markets to expect a more hawkish tone from the BoE, even though the central bank is still widely forecast to leave rates unchanged at today’s meeting. Further out, traders are pricing in roughly 32 basis points of additional tightening by year-end—slightly more than a quarter-point increase—with odds of a June rate hike above 50% and a full 25-basis-point move fully priced in by September.

At the same time, the latest UK labour market data showed wage growth losing momentum, while the unemployment rate held steady at 5.2%, with both figures coming in weaker than economists had anticipated.