The Pound Sterling (GBP) cracked significantly amid increasing risk-aversion and dovish remarks from Bank of England (BoE) Governor Andrew Bailey and policymaker Swati Dhingra about September’s monetary policy decision. The GBP/USD pair is expected to remain on tenterhooks as policy divergence between the BoE and the Federal Reserve (Fed) is likely to persist if the UK’s central bank decides to pause the policy-tightening spell.
Swati Dhingra said Wednesday that the current interest rate policy is sufficiently restrictive and further hikes in interest rates would make the economic outlook vulnerable. Fading consumer spending momentum and a deteriorating demand environment have started impacting the services sector, according to the latest survey data. The UK services PMI, which gauges business activity in the sector, pointed to a contraction in August for the first time since January.
