GBP: interest rates or hikes are on the cards in the coming years

Sterling continued its recent positive run against the US dollar on Friday after a slight blip on Thursday. The gains have been small admittedly, but perhaps it is a sign of some significant strengthening in the near future. Of course, there is no way of knowing, but a big swing in one direction is long overdue.

The Bank of England’s policy maker Silvana Tenreyo gave an interview saying that nothing could be ruled out following Brexit and that interest rate hikes and cuts were both on the agenda in the coming years. She also said that the Monetary Policy Committee is unsure how the British economy will react to Brexit. Truly, we are in unprecedented times and, if nothing else, we are in for an interesting time in the coming weeks, months and years.

Today is a quiet one for UK economic data releases, but tomorrow sees the Nationwide house prices and the Bank of England’s financial stability report. On Wednesday we’ll see the consumer credit report and on Friday we’ll see the Markit manufacturing purchasing managers’ index figure. However, the key release for this week is the consumer confidence report on Thursday. It is expected to rise from -10 to -8, but with last Friday’s survey, it could fall below expectations.