BoE: Even a 75 bps rate hike is unlikely to provide relief for sterling – Commerzbank

The Bank of England (BoE) is set to raise its policy rate by 50 bps. In the opinion of economists at Commerzbank, even a 75 bps hike will not be sufficient to lift the British pound.

BoE under particular pressure to deliver a courageous rate hike

“The BoE is under particular pressure today to deliver a courageous rate hike. However, even a 75 bps rate hike (expected is rather a 50 bps hike) is not likely to be sufficient to provide a lasting breather for sterling. 

“The dire growth outlook, rising government debt and high current account deficit point towards depreciation pressure on sterling continuing for now.”

See – BoE Preview: Forecasts from 10 major banks, a close call between 50 bps and 75 bps