GBP/NOK gains, focus sets on central banks

The GBP/NOK currency pair rebounded after a recent string of losses on Wednesday ahead of the outcome of Norges Bank’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, Norges Bank is expected to cut its key policy rate by 25 basis points to 4% at its September 18th meeting.

While the economic outlook remains uncertain, the central bank had said that in case conditions evolved broadly as expected, it might deliver more rate cuts by the end of this year.