Commerzbank: A volatile week for GBP

On February 10, economists at Commerzbank said that next week’s employment and inflation data will be the key to determining the Bank of England‘s next interest rate hike, which may lead to sharp fluctuations in the pound.

It is worth noting that the market has not yet ruled out the possibility of a rate hike by the Bank of England in March given the high upside risks to inflation. For example, it is important to clarify how strikes by public sector workers affect wages, and there is a risk of “second-round effects” as the job market remains fairly tight. Therefore, the Bank of England can only wait for more data to fully grasp the economic situation.