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British Pound: April Rate Cut Will be a Close Call

It has been a volatile week for the British pound with dovish Bank of England minutes and weak employment numbers offset by a much stronger than expected retail sales report.

April’s rate cut by the BoE will be a particularly tough call. Following the minutes and employment numbers, the expectation for a 25bp rate cut next month increased significantly, but the retail sales numbers definitely came from left field. Therefore next week’s current account, house price and CBI distributive trades report will be particularly important in determining whether the retail sales number was simply a fluke or representative of a broader recovery in the UK economy.