Sterling gains momentum as Commerzbank anticipates two additional Bank of England rate hikes to 4.25% amid resilient UK economic growth and sticky inflation.
The GBP/USD pair is positioned for potential upside as Commerzbank analyst Volkmar Baur anticipates a hawkish shift from the Bank of England. Driven by resilient UK GDP growth and persistent core inflation of 2.6%, the expectation of rate hikes in both November and February to a terminal rate of 4.25% provides a fundamental catalyst for sterling strength.
Commerzbank expects the Bank of England to hike rates to 4.25% by February.
The pound is supported by resilient UK economic growth and the expectation of higher interest rates to combat sticky inflation.
Commerzbank analyst Volkmar Baur projects the Bank of England will raise interest rates in November and February, targeting a 4.25% benchmark. The forecast follows upward revisions to UK GDP and persistent core inflation readings of 2.6%.
The bank cites resilient UK economic growth and sticky core inflation, which necessitate further interest rate hikes by the Bank of England.