BoE MPC member Catherine Mann warned that there could be depreciation pressure on Pound exchange rate if investor haven’t fully priced in recent hawkish message from Fed and ECB. Meanwhile, she reiterated that more are needed to be done regarding inflation.
“The important question for me with regard to the pound is how much of that existing hawkish tone (of Fed and ECB) is already priced into the pound”, Mann told BloombergTV. If it’s already priced in, then what we see is what we get. But if it’s not completely priced in, then there could be depreciation pressure” on Sterling.
Regarding interest rates, Mann said, “I’ve had recent speeches where I’ve indicated that I thought more needed to be done in order to ensure that expectations in particular are for a declining rate of inflation and the embeddedness to be mitigated.”