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Economists at Commerzbank analyze GBP outlook ahead of the UK Consumer Price Index (CPI) and labour market data.
If the labour market and inflation data turn out to be unfavourable, speculation about a further rate hike might gather momentum again on the market. This would support Sterling temporarily.
However, we remain sceptical regarding the BoE’s determination to fight high levels of inflation – as the September meeting once again demonstrated – and therefore expect Sterling to ease over the coming months.