MARKET PERSPECTIVE - Pound Strengthens Ahead of BoE Decision

According to Commerzbank, the British pound is rising while the Bank of England is expected to reduce interest rates in a forthcoming decision but adopt a cautious approach regarding future cuts. Commerzbank analyst Michael Pfister stated that the view that faster growth and higher inflation may require fewer interest rate reductions seems "well-established." Pfister mentioned that the market is pricing in fewer than four rate cuts of 25 basis points each by September 2025, including the decision on Thursday. He argued that if the BOE were to cut rates more than expected, the pound would be at risk of a decline. The GBP/USD has risen by 0.35% to 14.2932. The BOE's decision will be announced at 1500 GMT.