Sterling Takes a Breather as BoE Policy Decision Looms

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Pound down 0.1 vs dollar, euro

Bank of England policy decision 1100 GMT

LONDON, June 24, Reuters Sterling was steady on Thursday, with investors holding off major bets ahead of a Bank of England policy meeting set to show whether central bankers are worried over Britains recent jump in inflation.

Sterling fell 0.1 against the dollar to 1.3958. It was also down a similar amount versus the euro to 85.52 pence, a day after hitting its highest level versus the single currency since early April.

The BoE is expected to leave its benchmark rate at an alltime low of 0.1 and press on with its 895 billionpound 1.25 trillion bondbuying programme.

Yet in focus are signs of any concern over about a recent increase in UK inflation, which broke above the central banks 2 target and looks set to climb higher as the country reawakens its economy from its coronavirus slumber.

Governor Andrew Bailey and other BoE officials like other global policymakers grappling with economic overheating risks against the backdrop of huge stimulus programmes have mostly said Britains faster price growth is likely to prove transitory.

Still, expectations among investors have grown that the BoE will be one of the first major central banks to start hiking rates as soon as next year.

We would be surprised if the BoE provides a clear signal over the timing of rate hikes as soon as at todays policy meeting, MUFG analysts wrote in a note.

The BoE is unlikely to provide a more hawkish policy update…

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