Pound May Fall If Bank Of England Signals Caution And UK By-Election Raises Political Concerns

Jane Foley of Rabobank said the pound could decline if the Bank of England shows caution on raising interest rates and if a UK by-election intensifies political concerns. According to Jin10, Foley said weaker-than-expected UK inflation data released on Wednesday has added to debate over whether the Bank of England will extend its wait-and-see approach on Thursday. Foley added that if Andy Burnham wins Thursday’s by-election, he could challenge Prime Minister Starmer’s leadership. She said Burnham’s left-leaning stance, along with the prospect that fiscally conservative Chancellor Reeves could be replaced, may unsettle the UK government bond market and disrupt moves in the pound.