Weekly Roundup: Pound bolstered by hawkish BoE
Roxane Cody November 27th 2023 - < 1 minute read
After an initial lull at the start of the week amid a lack of UK data, the pound shot higher on Tuesday in response to some hawkish comments from Bank of England policymakers.
Testifying before Parliament’s Treasury committee, BoE Governor Andrew Bailey downplayed interest rate cut speculation, while his colleagues Dave Ramsden and Catherine Mann hinted more rate hikes may be necessary.
Sterling then stumbled midweek after Chancellor Jeremy Hunt unveiled his Autumn Statement. Hunt’s plans for growth failed to inspire GBP investors, while the Office of Budget Responsibility’s (OBR) slashing of its 2024 growth forecast from 1.8% to 0.7% also weighed on the Pound.
GBP exchange rates then bounced back to end the week on a high following the publication of some surprisingly positive PMI releases, as they helped to ease UK recession fears.
This week, there is a notable lull in UK economic releases. While hawkish BoE expectations may help the pound to maintain a positive trajectory at the start of the session, any further gains are likely to be tied to market sentiment. With an upbeat mood potentially helping to underpin the increasingly risk-sensitive currency.