Bank of England

Risks stemming from next Thursday's Bank of England interest rate decision are to the downside for Pound Sterling.

The resilience of the UK economy has taken many forecasters by surprise but risks keeping inflation higher than otherwise and over a protracted period of time, according to economists at Goldman Sachs, who say the Bank of England (BoE) is now likely to raise Bank Rate to 5% as a result. 

Bank of England (BoE) Chief Economist Huw Pill caused controversy this week when saying everybody must accept being poorer due to inflation but this wouldn't have been so if he also explained how inflation risks taking food directly from the plates of people in some of the world's very poorest countries. 

Bank of England (BoE) Chief Economist Huw Pill drew the ire of market pundits, media commentators and members of the public alike this week with the publication of controversial remarks suggesting Britons should just "accept that they're worse off," due to inflation, and below is the fanmail. 

Pound Sterling outperformed many other major currencies in the opening months of the year and remained buoyant through much of this week but there are two reasons why Bank of England (BoE) interest rate policy might now be an asymmetric risk on the downside for the months ahead. 

TS Lombard says two more Bank of England interest rate hikes are possible in the first half of 2021, and that the risks of a policy mistake are also growing.

"On balance, the committee probably becomes slightly more hawkish with Ms Greene’s appointment."

The odds of the Bank of England raising interest rates again in May are rising says Oxford Economics, an independent research consultancy and provider.

The Bank of England's Chief Economist warned it could still be too soon for the Bank of England to pause its interest rate hiking cycle.

There are concerns that the banking scare could lead to a more risk averse attitude among lenders, adding another squeeze to liquidity, just as companies are grappling with high interest rates.

Pound Sterling was trading around the middle of the major currency rankings for the period in the final session of the week but with little help from the Bank of England (BoE), which drew mixed responses from analysts and economists when announcing its latest interest rate decision on Thursday.

The Bank of England raised Bank Rate 25 basis points to 4.25%, its highest level since 2008, and said it would raise interest rates again if required.

Recent data have confirmed that UK inflation and its underlying drivers are moderating but economists and markets remain split over what to expect from the Bank of England (BoE) next week with some suggesting it could elect to leave interest rates unchanged for the first time in more than a year.  

Pound Sterling could come under pressure if the 'hawkish' tones coming from the Fed and ECB are not yet digested, says Mann.

GBP retreats on Bank of England Governor's speech.

The Bank of England must continue hiking interest rates and avoid a pivot as UK financial conditions have eased warns Catherine Mann.

The Pound to Dollar exchange rate came under pressure near 1.20 in the penultimate session of the week as financial markets mulled upside risks to Federal Reserve (Fed) and Bank of England (Fed) interest rates, the relative balance of which is potentially a constraint on Sterling's recovery prospects. 

The Bank of England (BoE) would risk going too far if it continues to lift Bank Rate as fast as it has in recent months, its chief economist Huw Pill has said, suggesting that he too could favour a return to more conventional sized increases, if any, as a response to lingering inflation risks up ahead.

Don't bet against the Bank of England's inflation forecasts, is the warning from a leading international investment bank following the release of softer-than-expected UK inflation figures for January.

The British Pound fell sharply in the wake of UK inflation numbers that prompted investors to reduce bets for the scope of future interest rate hikes at the Bank of England.