BoE unlikely to master inflation and recession without damaging GBP – Commerzbank

Sterling got a right old battering yesterday. Economists at Commerzbank expect GBP to continue struggling for the time being.

BoE torn between inflation Scylla and recession Charybdis

“The ONS announced that government deficit in December was higher than had been expected. The budget data rightly constitutes a GBP negative factor. Because against their background, real economic data are under much stronger scrutiny.”

“For none of the economic areas for which our economists produce projections is the outlook as pessimistic as for the UK. Against this background, it seems logical that it is assumed the BoE was facing a particularly difficult choice between the inflation Scylla and the recession Charybdis. It is difficult to imagine that the British central bankers will master these wanderings without damaging GBP.”