The pound heads into the new week with forecasters expecting it to trade between 1.3250 and 1.3550 against the US dollar, after a week in which even a Bank of England rate rise barely moved sterling. Cambridge Currencies set out the range in its weekly outlook published on Sunday, alongside a 1.1875 to 1.2100 range for the pound against the euro and 1.1050 to 1.1300 for the euro against the dollar.

The flat finish is the striking part of last week. On the European Central Bank's reference rates, the pound ended Friday at 1.3385 against the dollar, against 1.3399 a week earlier, a fall of just 0.10%. Against the euro it finished at 1.1988, against 1.1993 the previous Friday, down 0.04%. That calm covered a UK rate rise, the US midterm elections and a strong American jobs report, three events that would normally be expected to move a currency.

The Bank of England's decision was emphatic on paper. At its meeting ending on 4 November, the Monetary Policy Committee voted by a majority of eight to one to raise Bank Rate by 0.25 percentage points to 4%. The single dissenter, Catherine L Mann, wanted a half-point rise to 4.25%, and nobody on the committee voted to leave rates unchanged. It was the Bank's first rate increase since August 2023. UK consumer price inflation was 3.5% in September and the Bank expects it to rise to around 5% by the middle of next year.

The Bank has not committed itself to further rises. Its summary says only that monetary policy is not on a pre-set path and that the committee will adjust Bank Rate as necessary to bring inflation back to its 2% target. The median response to the Bank's own Market Participants Survey expects Bank Rate to reach 4.25% in February. The next decision is due on 17 December.

On paper, sterling starts the week with its strongest footing against both major currencies in months. At 4%, Bank Rate sits 150 basis points above the European Central Bank's 2.50% deposit rate and 12.5 basis points above the US Federal Reserve's 3.875% midpoint. That gives the pound a yield advantage over both the euro and the dollar for the first time since mid-September.

The tests come quickly. Bank of England Governor Andrew Bailey speaks on Monday evening, his first scheduled remarks since the rate rise. Deputy Governor Clare Lombardelli speaks at lunchtime on Tuesday and Chief Economist Huw Pill on Tuesday evening. What the three say about February is the likeliest source of a sterling move, since the market already expects one more quarter-point rise by then.

US inflation data lands on Tuesday at 13:30 GMT, and the week's biggest domestic test arrives on Thursday at 07:00, when the UK publishes third-quarter GDP alongside monthly GDP, industrial and manufacturing production and the trade balance. The Bank's November report expects growth of 0.7% in the third quarter, after 0.5% in the second, so Thursday checks the Bank's own forecast eight days after it raised rates on the strength of it. Euro area third-quarter GDP follows on Friday, with US producer prices the same day.

The American backdrop is firmer than it looked a few weeks ago. US nonfarm payrolls rose by 165,000 in October and the unemployment rate was 4.1%, while revisions added a combined 84,000 jobs to the August and September figures. The preliminary November University of Michigan survey put consumer sentiment at 51.0, up from 48.0 in October, although year-ahead inflation expectations of 4.3% remain far above anything the Federal Reserve would call anchored.

The ranges are a forecast, not a promise, and the week has already shown how little scheduled news can move the pound when the market has priced it in advance. Two-year mortgage rates have risen by nearly 50 basis points since the start of September, and the Bank confirmed it held £362 billion of gilts for monetary policy purposes on 4 November. Traders will be watching whether Bailey and his colleagues use this week's speeches to endorse, or cool, the February rise the market already expects.