Economists: if the Bank of England believes that the bet on interest rate cuts is excessive, the pound may strengthen.

Ebury economist Enrique Diaz-Alvarez stated in a report that if the Bank of England hints that market expectations for a rate cut are excessive, the pound may receive a boost. Data from LSEG shows that the market expects the Bank of England to cut rates by 90 basis points for the remaining time in 2025. He suggests that it will be difficult for the Bank of England to meet these expectations, and the Bank may "prefer to keep its options open." Additionally, the pound should benefit from a Labour government and closer UK-EU relations.