The Bank of England (BoE) is signaling an early end to the rate hike cycle. As reported by Commerzbank economists, if inflation turns out to be more persistent than the Bank of England expects, its dovish stance will likely weigh even more on the sterling.
Pound weakness is likely to persist next year as well
“The BoE risks 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, so we expect further appreciation moderate EUR/GBP throughout the year.”
