GBP gains on hot inflation expectations – BBH
Pound Sterling (GBP) is firmer against USD and steady versus EUR after the BoE’s September survey revealed a surprise uptick in inflation expectations.

Pound Sterling (GBP) is firmer against USD and steady versus EUR after the BoE’s September survey revealed a surprise uptick in inflation expectations. With 1-year expectations rising to 3.5% and 3-year to 3.1%, the highest in nearly a year, policymakers face a difficult balancing act between inflation risks and weak growth, BBH FX analysts report.

BoE survey shows 1Y outlook at 3.5%

"GBP is up versus USD and range-bound against EUR. The Bank of England’s (BOE) September DMP inflation expectation survey ran hot. 1-year inflation expectations unexpectedly rose 0.1pts to 3.5% (consensus: 3.4%), the highest since December 2023. 3-year inflation expectations also increased 0.1pts to 3.1%, the highest since November 2023."

"Bottom line: elevated UK inflation expectations and a sluggish growth outlook complicates the BOE’s task and supports the uptrend in EUR/GBP."

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