Weekly Roundup: Pound rocked by recession fears 

The pound held strong at the start of last week, with GBP investors betting on the currency ahead of the Bank of England’s interest rate decision.

A souring market mood on Tuesday put some pressure on the increasingly risk-sensitive pound. However, hawkish BoE bets prevented steeper losses.

Turbulence hit Sterling in the middle of the week. A hotter-than-forecast UK consumer price index stoked fears that the BoE would need to trigger a recession to bring inflation to heel.

Anxiety intensified on Thursday after the bank opted for a larger 50bps hike. This sparked volatility, although GBP was able to edge higher against its weaker peers.

Mixed data then left the pound to waver at the end of the week. While UK retail sales unexpectedly picked up, the latest PMI surveys were worse than expected.

Turning to the week ahead, the pound is recouping some losses at the start of the session as last week’s shocks fade.

The only UK data of note this week is the final GDP reading for the first quarter, due out on Friday. Only a revised reading is likely to cause much movement.

In the meantime, some BoE speeches could impact the pound. If policymakers voice concerns about the impact of higher rates, Sterling could stumble.