Markets are increasingly convinced the BoE will deliver a rate cut next month, after weak labour data showed the UK economy is losing traction. The shift in sentiment has sent the FTSE 100 powering to fresh record highs, with 10,000 level now within reach. Sterling has come under broad pressure, particularly against its European peers. The labor market’s deterioration—rising unemployment, slower pay growth, and growing slack—suggests more weakness than the MPC’s November forecast assumed.
Attention now turns to Thursday’s Q3 GDP report, expected to show a modest 0.2% qoq expansion and stagnation in September. Such subdued momentum could persist into next year, reinforcing calls for the BoE to resume its gradual easing cycle. The Bank is seen returning to a quarterly cut rhythm, delayed only by uncertainty surrounding last week’s Autumn Budget. A weaker-than-expected GDP print would likely fuel talk of a deeper, more sustained rate-cut trajectory into 2026.
In markets, FTSE’s decisive break above its recent channel signals strong bullish acceleration. Near term outlook will stay bullish as long as 9638.98 support holds. Further rise should be seen through 10k psychological level at 100% projection of 8707.65 to 9577.08 from 9276.91 at 10146.34.
GBP/CHF is still bounded in range above 1.0499 support despite yesterday’s dip. Yet, outlook remains bearish with 1.0658 support turned resistance intact. Firm break of 1.0499 will resume the larger down trend to 100% projection of 1.1204 to 1.0658 from 1.0959 at 1.0413.
