UK Data Calendar Challenges BoE Tightening Expectations

The UK data calendar is picking up pace this week, with jobs and wage data scheduled for release on Tuesday, followed by July Consumer Price Index (CPI) figures on Wednesday. According to ING's UK economist James Smith, these numbers will be too soft to justify the 55bp of Bank of England tightening still priced into UK money market curves.

This could create an opportunity for EUR/GBP to move back toward the 0.8575/85 area, as Sterling faces a potential repricing in response to the data. ING maintains slightly negative views on Sterling, despite M&A inflows providing temporary support.