ING: Investor Rate Hike Expectations Boost British Pound
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Golden Ten Data reported on May 5 that ING strategists stated in a report that investors expect the Bank of England to raise rates quickly, which has provided support for the pound, and the pound may remain strong relative to the euro. Elevated energy prices have prompted investors to raise their expectations for Bank of England rate hikes to tackle energy price-driven inflation. Data shows that the market has fully priced in two Bank of England rate hikes by 2026, with the first hike expected before July. Strategists mentioned that unless the Bank of England clearly signals it will raise rates less than the European Central Bank, the EUR/GBP exchange rate is "likely to remain around the middle of the 0.86-0.88 range for an extended period."
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