Sterling to ease over the coming months – Commerzbank

Economists at Commerzbank analyze GBP outlook ahead of the UK Consumer Price Index (CPI) and labour market data.

Speculation about a further rate hike might gather momentum on unfavourable data 

If the labour market and inflation data turn out to be unfavourable, speculation about a further rate hike might gather momentum again on the market. This would support Sterling temporarily.

However, we remain sceptical regarding the BoE’s determination to fight high levels of inflation – as the September meeting once again demonstrated – and therefore expect Sterling to ease over the coming months.