Bank of England

The Pound initially fell in the wake of the Bank of England's decision to hike Bank Rate to the highest level in 15 years but it soon recovered as market expectations for further interest rate hikes converged with the Bank of England's guidance as to how many more it would likely deliver.

The British Pound tracked bond yields and fell further against the Euro and Dollar after the Bank of England raised interest rates by 25 basis points, representing a downshift from the 50bp hike delivered in June.

Pound Sterling has remained an outperformer among major currencies for the year in recent trading but with market interest rate assumptions implying close to unprecedented monetary tightening still to come for the economy, the opportunity or imperative for protecting against future currency losses is rarely greater.

Some economists say a widely monitored private sector survey is an indication that UK inflation could fall notably further by year-end, leading the Bank of England (BoE) to "pause" its interest rate cycle soon, but the broader implication is that the BoE may already 'overtightened' and could need to consider cutting borrowing costs in the near future.

Economists say although the prospect of a second consecutive 50 basis point rate hike in August has greatly receded following softer-than-expected June inflation figures, an elevated services inflation gives the Bank of England cause to hike on at least two more occasions.

Rising financial market expectations for interest rates and other circumstances almost unique to the UK are stoking a form of tension between financial stability and inflation-targeting mandates of the Bank of England (BoE) while potentially creating the appearance of comparability between Britain and the biblical city of Babylon.

A key Bank of England yardstick used to ascertain domestic inflationary pressures confirms UK wage inflation remains resolutely sticky, casting doubts on the Bank's ability to bring inflation back to 2.0% in the medium term.

The Bank of England pushed back against market expectations that showed it was expected to cut interest rates from 2024, warning inflation would prove too persistent in nature to facilitate lower rates.

Bank of England (BoE) Governor Andrew Bailey indicated on Thursday that Bank Rate may already have risen as far as it's likely to as a result of the recent increase in workforce pay and the rebound in core inflation in remarks that were suggestive of risk to market expectations of a further large increase in the months ahead.

The inflation situation faced by the Bank of England (BoE) is in one way potentially a sign of things to come for the European Central Bank (BoJ) and any other central banks presiding over monetary frameworks where the transmission of interest rate changes into the real economy is slower than it is in the UK. 

The Bank of England has had a "crossing the rubicon" moment and will hike interest rates by a further 100 basis points before the year is done says NatWest Markets.

The Bank of England grasped the seriousness of the UK's inflationary pressures by opting to raise interest rates by 50 basis points, a move that Pound Sterling Live reported was a bare minimum if the Pound's recent gains were to be defended.

The Canadian Dollar was mostly stronger in a resilient showing from the Loonie heading into the latter half of the week while Sterling was weaker in many parts ahead of a widely anticipated Bank of England (BoE) interest rate decision with the result being modest losses for GBP/CAD and uncertainty about the outlook.

Pound Sterling was swamped with widespread losses as currency and interest rate markets responded to a further increase in one of the UK's most important measures of inflation barely more than a day out from the latest Bank of England (BoE) policy decision, leading to a wave of forecast changes among analysts and economists. 

Pound Sterling fell widely in the midweek trading session but its heaviest losses came in relation to the Krona after a new record for one measure of inflation appeared to stoke concerns about what might become of the UK economy as the Bank of England (BoE) effort to return inflation to the target continues from Thursday. 

The Pound to Dollar exchange rate soon gave back short-lived gains in midweek trade after the Office for National Statistics (ONS) suggested an inflation genie may be seeping out of a lantern in London with a May consumer price outcome that is unlikely to have been welcomed by the Bank of England (BoE).

The Pound to Dollar exchange rate climbed from earlier lows in the final session of the week but its recovery could be limited if UK economic data encourages financial markets to maintain their sharply increased expectations for the Bank of England (BoE) Bank Rate.

One of the UK's largest high street lenders says the recent rise in UK core inflation in April represents a "game-changer" moment for UK interest rates and the broader economic outlook.

Pound Sterling exchange rates fell widely in midweek trade after UK inflation fell less than many forecasters expected for the recent month with possible implications for the Bank of England (BoE) interest rate outlook, though analysts and economists have a wide range of views on the outlook.

The Bank of England is expected to hike interest rates on a further three occasions according to market-based expectations following the release of inflation data that was stronger than analysts were expecting.