BOE's Delay Strategy Could Start to Weaken Sterling

Dow Jones
2 hours ago

1327 GMT - The Bank of England's strategy of delaying interest-rate rises could start to weigh on sterling, Deutsche Bank's Shreyas Gopal says in a note. This strategy has so far helped keep sterling stable as it's an appropriate response to a supply-driven inflation increase and in the context of still mildly restrictive monetary policy and uncertainty over the labor market trajectory, he says. The BOE could vote 6-3 to leave rates steady and leave forward guidance largely unchanged Thursday, which is unlikely to be sufficient to prevent some sterling weakness, he says. Sterling's yield advantage against the euro is starting to narrow as the European Central Bank raises rates, he says. The euro rises 0.1% to 0.8571 pounds.

 

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