Market will have to lower its BoE rate hike expectations, weighing on the pound – Commerzbank

The Bank of England (BoE) does not really seem to have managed to dampen the market’s rate hike expectations. Consequently, the British pound is at risk of suffering a significant fall, economists at Commerzbank report.

BoE seems to have been unable to convince the market

“So as long as the economic weakening is not reflected in the data the market will probably continue to bank on the BoE hiking its key rate from the current 0.75% to above 2% by the end of the year due to high inflation levels.” 

“We see the risk of the market having to lower its rate hike expectations, which is likely to put pressure on sterling.”