BoE decision was neutral for Sterling, contrary to expectations – Commerzbank

The Bank of England (BoE) raised its key interest rate by 25 basis points. BoE has done a good job, in the opinion of Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank.

BoE did not give even the slightest hint of a less hawkish approach

“The BoE has done a good job. I do not mean its monetary policy, but its communication policy. Despite its small rate step of only 25 bps it did not create the impression that its determination to fight inflation has weakened. And that is why yesterday’s BoE decision was neutral for Sterling – contrary to my expectations.”

“Contrary to the Fed, the British central bankers did not give even the slightest hint of a less hawkish approach. That is why the rate cut was not GBP negative.”