Sterling rangebound as market awaits CPI figures

The Pound remained rangebound on Monday, with the only notable news being comments from Bank of England's Deputy Governor Ben Broadbent, who again hinted that interest rate cuts could appear in the upcoming summer months.

‘There is a range of views across the Committee on this point. In view of the rarity of events like this over the past, and the associated uncertainty about the future, that’s entirely understandable. Whatever the priors of its individual members the MPC will continue to learn from the incoming data and, if things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible Bank Rate could be cut some time over the summer.’ Ben Broadbent.

Currency markets now see the chance of a rate cut in June at over 50%. Yesterday’s comments from Broadbent increased rate cut bets further, putting downward pressure on GBP.

Looking ahead, attention will shift to the UK's latest CPI figures, set for release on Wednesday. Both headline and core inflation are forecast to slow in April, falling below the Bank of England's benchmark target of 2%. If the figures meet these forecasts, GBP is likely to come under additional pressure as interest rate cut bets for June will increase further.

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