Economists at ING analyze Pound Sterling (GBP) outlook ahead of Thursday’s Bank of England (BoE) decision.
GBP may absorb any further recovery in the Dollar better than most other currencies
Wednesday’s release of February’s CPI figures could significantly influence the Bank of England’s (BoE) decision on Thursday. Attention will be particularly focused on services inflation, which we anticipate to decelerate but still remain high at around 6%, aligning with the Bank’s projections.
Despite the BoE softening its hawkish stance in February, we believe the Bank is unlikely to rush into further dovish measures, unless there’s a significant downside surprise in Wednesday’s CPI data.
In the broader context, the Pound might fare relatively well against the Dollar compared to other currencies. We foresee EUR/GBP stabilizing around the 0.8500 mark or possibly trading closer to the significant support level of 0.8500 in the short term.
