The Bank of England governor Andrew Bailey indicated on Friday that markets can anticipate more than one interest rate cut this year, saying he is increasingly confident inflation is heading towards the target, per the Financial Times. Key quotes “All our meetings are in play, we take a fresh decision each time.” “The global shocks are unwinding and we are not seeing a lot of sticky persistence coming through at the moment. That is the judgment we have to keep coming back to.
How does the Bank of England’s monetary policy influence Sterling? When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money.