The Pound Sterling (GBP) was able to benefit this week from the higher-than-expected inflation data. Economists at Commerzbank analyze GBP outlook.
Further data publications worth a look
Concerns that the disinflation process could stall are likely to have increased as a result of the latest inflation publication. And the market is likely to be betting that the BoE will react appropriately and therefore be more cautious about the first interest rate cuts.
It is still worth taking a look at today’s retail sales and next week’s purchasing managers’ indices. This is because the BoE is concerned that the tightening of monetary policy to date could stifle the economy too much. However, the economy has so far proved to be more robust than initially feared.
If the upcoming economic data paints a similar picture, the BoE will probably feel more comfortable waiting a little longer before cutting interest rates, which in turn would be positive for the Pound.