GBP: Interest rate outlook uncertain – Commerzbank
|Commerzbank's Michael Pfister analyzes the Bank of England's current stance on interest rates, highlighting the potential for surprises despite no expected changes at the upcoming meeting. The report notes the delicate balance the BoE faces between persistent inflation and weakening growth, suggesting that the risks to the Pound may lean towards further interest rate cuts.
Bank of England's cautious approach
"If the vote is closer than expected, the market will likely bring forward its expectations of a rate cut and the pound will suffer."
"On the other hand, the new forecasts will be published, the first since the budget announcement at the end of November. It will be interesting to see how the decision-makers assess the impact."
"As inflation has repeatedly been lower than expected in recent months, the inflation forecast is likely to be revised downwards. The only question is how sharp the correction will be."
"However, we suspect that the risks to the pound are currently more one-sided and that there is a greater danger of seeing signs of further interest rate cuts."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.