LONDON, Nov 1 Reuters Britain39;s pivotal tax, borrow and invest budget has elevated the Bank of England39;s interest rate horizon but sterling has hesitated and reversed suggesting some think the BOE may well take a more nuanced view over the coming year.

BOE officials are currently in their traditional blackout period ahead of next Thursday39;s interest rate decision, so the central bank has had no immediate reaction to this week39;s budget.

But markets have already tweaked their forecasts after reading the runes of the UK fiscal plans and revised forecasts from the independent Office for Budget Responsibility, which show higher growth and inflation next year.

Not only are markets now pricing in at least one fewer UK rate cut next year than they had been, but they39;ve even injected some doubt about whether there will be any easing next week.

Up until Wednesday, money markets appeared confident that the BOE would announce their second 25 basis point cut of the year next week, reducing the policy rate to 4.75. The chances of this happening have since fallen to just 80. And Goldman Sachs has broken with the pack and is now forecasting that the Bank will stay on hold at Thursday39;s meeting.

Moreover, implied market rates for the end of 2025 have risen to more than 4. That39;s now half a point higher than the Fed equivalent in a year39;s time even though the two are little more than 10bps apart right now.

Fiveyear gilt yields are also higher than those of U.S….