While no policy changes were made today, the Bank of England (BoE) stands ready to adjust its asset purchase programme. Analysts at Nordea see more GBP weakness ahead.

Key quotes

“In line with expectations, the BoE did not change any of its policy instruments today.”

“On inflation, the CPI index is expected to decline to below 1% in the spring due to lower oil prices primarily.”

“In terms of the sterling, the reaction was fairly muted as the outcome was in line with expectations. We still look for GBP downside given the increasingly concerning corona situation in the UK, fear of returning no-deal Brexit headlines as well as an exposed banking sector.”