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Sterling is under intense pressure as interest rate hikes deepen fears of a recession.
The outlook for the UK darkened as austerity policies dampened the economic outlook.
BoE Peel said rising unemployment and fewer job vacancies would eventually lead to lower wage growth.
Sterling (GBP) sold off after failing to test the key resistance at $1.2800 as the Bank of England (BOE) hiked interest rates started to deepen recession fears. The GBP/USD pair fell sharply as rising interest rates threatened the UK’s economic outlook. Britain’s strong labor market resilience is waning as the economic outlook dims and businesses slow their hiring process.
The Bank of England’s aggressive rate-tightening cycle has already begun to affect Britain’s housing sector and a strong labor market, but is laying the groundwork for inflation to return to 2%. Andrew Bailey appears confident inflation will fall back to 5% by October as the central bank will keep rates “sufficiently restrictive” for “long enough time
