Sterling eased following yesterday’s Central Bank Governor Andrew Bailey speech. He did not make any truly restrictive comments. Therefore, GBP is set to remain under pressure, Antje Praefcke, FX Analyst at Commerzbank reports.

Bailey is putting the brakes on Sterling

“Bailey is not really committing very firmly to further strong tightening measures. In view of an inflation rate in double-digits I would have hoped for more commitment towards rate hikes. But obviously the BoE is not willing to inflict (further) harm on the economy and the population to get a grip of inflation.”

“BoE continues to progress cautiously and is waiting for further data publications – probably in the hope that inflation really will fall quickly over the coming months as it expects so that it will not have to take much more action.”

“Based on Bailey’s comments it seems that any positive set of economic data will be used by the BoE to tighten rates less or to pause the cycle. And this impression cannot be positive for Sterling. The BoE meeting on 23rd March is likely to be of particular interest against this background.”