LONDON, Nov 7 — Britain’s pound hovered near a one-week low versus the dollar today as the market temporarily shifted its focus from next month’s parliamentary election to a Bank of England policy meeting.

With a snap election due on December 12 and a new Brexit deadline set for January 31, the BoE is expected to keep its key policy rate unchanged at 0.75 per cent and not give an explicit steer on where interest rates are headed.

"One of the problems the BoE has is that you have binary events coming up — the election and Brexit,” said Berenberg senior economist Kallum Pickering. "So from a pure policy point of view, the BoE doesn’t pre-empt these events.”

Sterling briefly dipped to a one-week low of US$1.2837 (RM5.31) before steadying around US$1.2865.

Against the euro, the pound was steady on the day at 86.09 pence.

Increasingly economists believe the BoE will cut interest rates at some point next year given a slowing economy and Brexit uncertainty. Financial markets are pricing in a roughly 55 per cent chance of a 0.25 percentage point cut in 2020.

Deutsche Bank economists say they no longer forecast a hike next year and instead see an increasing risk of a rate cut when the BoE delivers its January inflation report — Governor Mark Carney’s final MPC meeting. — Reuters