BoE Expected to Hold Rates, Hawkish Tone May Not Support Sterling – ING

According to ING FX strategist Chris Turner, the Bank of England is set to maintain its benchmark interest rate at the upcoming meeting, with a 7-2 vote split in favor of no change. While the central bank is expected to strike a hawkish tone, Turner argues this will not be enough to support the British pound.

He forecasts UK headline inflation will peak around 3.5% later this year, a level that does not warrant additional rate hikes. This outlook suggests the BoE’s cautious stance will continue to weigh on sterling, as markets digest a less aggressive tightening path compared to other major central banks.

The pound has already faced headwinds from mixed economic data and uncertainty over the UK’s fiscal trajectory. Turner’s assessment reinforces the view that GBP is likely to remain under pressure in the near term.