LONDON, Oct 27 (Reuters) - The British pound slipped against the dollar on Friday, as investors looked cautiously ahead towards a Bank of England policy meeting next week which could see interest rates rise for the first time in over a decade.
The market is priced for a hike after BoE rate-setters next meet on Nov. 2, but continued uncertainty over the health of the British economy has raised doubts that the rise is necessarily a shoo-in.
Data from British mortgage lender Halifax on Friday showed public confidence in the outlook for house prices has dropped to its lowest in nearly five years, weighed by pessimism about the economy.
“If anything, it presents another potential issue for the BoE as it thinks about policy,” said Simon Derrick, currency strategist at BNY Mellon.
But analysts said the question was more about whether a BoE move would signal the start of a series of rate hikes.
“The main question for GBP (is) what happens to expectations for rates beyond November. Our economists have just reiterated their view... that November’s hike will be the only move in 2017/2018,” Adam Cole, currency strategist at RBC Capital Markets wrote in a note to clients.
Two U.K. credit rating reviews due to be released on Friday by ratings agencies Fitch and Standard & Poor’s will give further clues about the British economy and insights into whether the BoE will raise rates.
Sterling was down 0.4 percent against the dollar trading at $1.3110 at by 0720 GMT.
Against the euro on Thursday the pound hit highs not seen since the start of the month. It slipped back a little in early trading on Friday, down 0.2 percent on the day at 88.72 pence at 0723 GMT. (Reporting by Polina Ivanova; editing by Saikat Chatterjee and Peter Graff)