According to experts at Commerzbank, if the Bank of England (BoE) decides to suspend its rate hike cycle after its meeting on Thursday, the pound could suffer.
The BoE will likely be perceived as the central bank that is less confident.
“Whether the BoE actually delivers on Thursday is crucial. Sterling is likely to suffer significantly if it does not.
We continue to be pessimistic about the medium-term performance of Sterling because “the BoE will undoubtedly be perceived as the more reluctant central bank, in particular in compared with the ECB.”