Risk of BoE overtightening into a recession may restraint GBP’s recovery – OCBC

Economists at OCBC Bank maintain a neutral-to-mild constructive outlook on the British Pound and note the risks to watch.

Receding recession fears in the UK supportive of GBP’s recovery 

Neutral-mild constructive outlook as domestic credibility is restored, softer energy prices offer relief to finances and the Bank of England is still hawkish. 

Risks to watch if stagflation concerns materialize as growth momentum could come under pressure if the BoE over-tightens to fight stubborn inflation.

See: Very inverted yield curve may help the Pound – ING