Dovish BoE should weigh on the Pound – Commerzbank

The Bank of England (BoE) is signaling an end to the rate hike cycle soon. If inflation does turn out to be more persistent than the BoE expects, its rather dovish stance is likely to weigh further on the Pound, economists at Commerzbank report.

GBP weakness is likely to persist next year as well

“The BoE runs the risk of ending its fight against inflation too soon and inflation becoming a more persistent problem. This risk is likely to weigh on the Pound in the coming months, which is why we expect further moderate appreciation in EUR/GBP over the course of the year.”

“GBP weakness is likely to persist next year as well, as the BoE is likely to cut its key rate again in view of the weak economy and somewhat lower inflation.”

See – Source: Commerzbank Research