The pound was little moved this morning as annual inflation in the UK hit highest level in three decades at 6.2% in February. Economists at ING expect GBP to remain supported by comments from BoE's Bailey and Chancellor Rishi Sunak.

Focus on Bailey and Sunak

“CPI figures in the UK showed an above-consensus acceleration in inflation. The headline rate reached 6.2% vs the expected 6.0%, and the core advanced to 5.2% in February.”

“The combination of above-consensus inflation, some potential hawkish comments by Bailey and a pro-growth announcement by Sunak could support the view that the BoE will have more room for monetary tightening, ultimately helping the pound today.”

“We expect a decisive break in EUR/GBP below 0.8300. After that, the next big level to watch is the 0.8200 7 March low.”