GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

GBP: Watch for data outliers

GBP: Watch for data outliers

Today’s focus will be on the Bank of England’s Decision Maker survey, which has pointed to easing pay and price expectations over the coming months. Hard data has pointed in the opposite direction, and this might emerge again as an outlier in a very “hawkish” set of data for the BoE and markets today.

Markets remain highly sensitive to any incoming developments on the price side and the still quite aggressive BoE tightening expectations (140bp by January 2024) do point to some risk of recalibration (and GBP downside risks) around any release.

EUR/GBP has been weakening in the past two sessions, but may find some support around current levels and even converge back to 0.8600 as the overbought pound faces some BoE repricing threat.

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Topics

gbp bank of england markets eur/gbp hawkish support levels downside risks tightening expectations weakening price expectations pay expectations Decision Maker survey data outliers recalibration overbought pound BoE repricing threat.