GBP: Upside risks to UK rates from Sep BoE meeting - ING

According to analysts at ING, the combination of more robust UK inflationary signals and a slight hawkish tilt at the September BoE meeting (Thu) - at least relative to what markets are pricing in - could provide a turning point in the GBP sentiment this week.

Key Quotes

“With near-term political risks priced in - and any fallout from Parliament's EU Repeal Bill vote likely to be short-lived - we look for a higher wage inflation in the jobs report (Wed) to nudge GBP higher.”

“We look for a 7-2 MPC vote split at the BoE event, though we do think the risks are skewed more towards there being a third dissenter (as opposed to a retreating dissenter). While the statement may refer to renewed political risks and retain much of the same cautious rhetoric as last month, we expect to see more direct references to GBP weakness - and what this could mean for the growth-inflation policy trade-off. Equally, some MPC members may cite this as a reason for earlier hikes than previously anticipated in the meeting minutes. Overall, we see potential upside risks to short-term UK rates and GBP from the BoE meeting.”