GBP/CAD holds near 11-week high ahead of BoE, BoC

The GBP/CAD currency pair held close to an 11-week high of 1.8825 on Wednesday ahead of the outcome of the Bank of Canada’s and the Bank of England’s policy meetings.

The Bank of England is expected to keep its benchmark interest rate intact at 4% at its September 18th meeting.

In August, the BoE lowered its key rate by 25 basis points to 4% – the lowest rate since March 2023.

August’s decision came after a rare two-round vote that revealed sharp divisions over how to cope with sticky inflation and a softening economy.

Five of the nine policy makers supported a 25 basis point rate cut, while four voted for leaving rates on hold.

It was the first time in the BoE’s history that two votes were required to reach a majority on interest rates.

BoE Governor Andrew Bailey said it was a “finely balanced” decision and reiterated that future rate cuts would be “gradual and careful.”

Meanwhile, the Bank of Canada is expected to lower its benchmark interest rate by 25 basis points to 2.50% at its September 17th policy meeting.

In July, policy makers noted that the Canadian economy had so far remained resilient to tariffs already mandated, as employment keeps holding up and second-half growth forecasts remain optimistic under the current tariff scenario.

Yet, the economy was expected to contract in Q2, as exporters received fewer orders after front-loading deliveries in Q1.