The Bank of England (BoE) might struggle to get inflation under control. Therefore, economists at Commerzbank expect sterling to remain under pressure.

BoE still wants to show consideration for the bond markets

“Doubts might soon arise as to whether the BoE will actually stick to its restrictive monetary policy if the economy were to fall into a significantly deeper recession than so far assumed. In addition, the BoE apparently still wants to show consideration for the bond markets and thus the treasury by wanting to delay its QT plans.” 

“We remain sceptical whether the central bank will hike rates sufficiently to get inflation under control, and as a result, we also remain rather pessimistic as far as sterling is concerned.”