Mitsubishi UFJ analyst Lee Hardman says market expectations for Bank of England
rate hikes appear overheated, leaving sterling vulnerable to depreciation.
"There has been no sign of second‑round inflation effects so far, and a
persistently weak UK labour market has eased some of the BoE's pressure to
tighten," he said. He warned that if energy prices do not improve, the BoE may
find it hard to ignore inflation that could reach around 4% in early next year,
though current rate‑hike expectations are already overheated.
