Commerzbank: sterling remains attractive as BoE rate cuts lag behind

Commerzbank said it expects the Bank of England's rate-cutting cycle to lag behind that of other central banks, making the pound attractive. The European Central Bank has cut interest rates twice and the Federal Reserve began cutting rates by 50 basis points on Wednesday, but the market expects the Bank of England to cut rates at a slower pace, Ulrich Leuchtmann, foreign exchange analyst at Commerzbank, said in a report. That could change if U.K. inflation eases quickly, he said, as inflation data always makes investors betting on a stronger pound nervous. If the data supports a positive outlook for the pound, it won't lead to significant strength, but it should bring some relief, he said.