Pound Sterling: Analyzing the Impact of Huw Pill's Comments and Upcoming Rate Hike

GBP: Still digesting Pill's comments

GBP: Still digesting Pill's comments

With a UK calendar offering very little on the data side, sterling markets are still digesting last week’s comments by Bank of England’s Chief Economist Huw Pill who explicitly favoured a “higher for longer” approach over a “higher peak”. Markets are currently pricing in a lower peak rate, at around 6.70% at the moment, although a September hike is fully priced in and is ING’s base case too.

For now, EUR/GBP may stay around 0.8540/0.8570 given now major inputs in the eurozone and the UK calendar. However, in line with our call for an ECB surprise hike next week, we expect another jump above 0.8600 next week.

Francesco Pesole

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Topics

bank of england eur/gbp ing eurozone UK calendar September hike peak rate Chief Economist sterling markets higher-for-longer Huw Pill higher peak ECB surprise hike