BOE Set to Hold Rates as UK Budget Looms Over Decision

Central Banks and Interest Rates - Central banks in Australia, Sweden, and Brazil are expected to maintain current interest rates, while Mexico may implement a rate cut [1] - The Bank of England (BOE) is likely to hold rates at 4% due to inflation being nearly double its 2% target, with a potential cut not expected until a clear downtrend in inflation is observed, likely by April [2][4] - The BOE's decision to pause rate cuts would end a pattern of reducing rates at every other meeting since August 2024, contrasting with the US Federal Reserve's recent policy loosening [3][5] Economic Data and Forecasts - Recent softer-than-expected economic data has increased uncertainty regarding the BOE's upcoming meeting, with a hold being more likely than a cut [2] - The US Federal Reserve is cautious about further cuts, with upcoming speeches from Fed officials expected to provide insights into the economy and job market amid delayed official data releases due to a government shutdown [6][7] - Private-sector reports are anticipated to show modest increases in employment, with ADP Research projecting a rise in October private employment after previous declines [8] Regional Economic Insights - In Canada, Prime Minister Mark Carney's upcoming budget is expected to cut operating spending while investing in capital projects, with a projected deficit of at least C$70 billion ($50 billion) [10] - Economists predict continued softness in Canadian job data, following a net loss of 45,900 positions in the third quarter [11] - In Asia, factory activity releases will provide insights into the region's manufacturing amid global trade strains, with key data from China, India, South Korea, Taiwan, and Japan being closely monitored [12] Central Bank Meetings and Decisions - Sweden's Riksbank is expected to keep its rate at a three-year low of 1.75%, while the European Central Bank and other regional banks are also anticipated to maintain current rates [18][20] - The Turkish central bank faces challenges with inflation remaining above 2% in October, while Madagascar may lower its key interest rate as inflation slows [23][24] - In Latin America, Brazil's central bank is expected to hold rates at 15%, while Mexico's Banxico is likely to implement a rate cut to 7.25% amid improving inflation conditions [25][29]