Pound Sterling capitalizes on improved market sentiment and BoE’s Mann hawkish commentary. Katherine Mann favored an aggressive policy-tightening approach. Investors shift focus to the UK August GDP data scheduled for Thursday. The Pound Sterling (GBP) stabilizes after recovering from a six-month low as market sentiment improves and Bank of England (BoE) policymaker Katherine Mann calls for a more aggressive approach to bring down inflation to 2%. Last week, BoE Governor Andrew Bailey said he expected inflation to decline to or below 5% by year-end, but added that he doesn’t promise the achievement of price stability in a timely manner.
The UK manufacturing and construction sectors are bearing the brunt of higher interest rates. UK’s factory activity has been contracting, with the PMI gauge coming in below the 50.0 threshold for a long period. To get more insights about the current status of the economy, investors will shift focus to the UK factory activity and GDP data for August, which will be released on Thursday.