The Bank of England (BoE) recently announced its expectations of a significant decrease in inflation rates, which are currently in double digits. However, this prediction is yet to be reflected in the economic data. As a result, economists at Commerzbank forecast potential struggles for the British Pound (GBP).
Commerzbank expects GBP weakness
Commerzbank economists predict that the weakness of the GBP is likely to continue in the upcoming year. This is due to the potential for the BoE to cut its key rate once again. The weak economy and lower inflation rates may trigger this move by the BoE.
impact on the GBP
A potential rate cut by the BoE may cause GBP weakness, leading to a decline in its value. This could also lead to further economic issues, as lower GBP value may impact the country’s import and export markets, causing inflation to rise. Additionally, businesses may struggle with higher costs and reduced profitability due to the weakened currency.
The Bank of England predicts a significant drop in inflation rates, which may lead to potential struggles for the GBP. Commerzbank economists also expect the GBP weakness to continue due to the potential rate cut by the BoE. This could have significant impacts on the economy, including increased inflation and reduced business profitability. It remains to be seen how the situation will unfold in the coming months, but it is clear that the GBP may face challenges in the future.