Testimony from BoE's Governor Bailey should be seen as a negative event risk for Sterling – ING

Pound Sterling (GBP) came under bearish pressure after the UK released some welcome January Consumer Price Index (CPI) numbers. Economists at ING analyze GBP outlook.

Soft UK inflation data

Headline and core figures have come in marginally lower than expected. The CPI services figure, which is closely watched by the Bank of England, has edged up to 6.5% YoY but remains lower than the 6.8% consensus. 

This softer data has helped EUR/GBP bounce off support at 0.8500 and sent GBP/USD under 1.2600 again.

Look for testimony from the Bank of England's Andrew Bailey where he may shed more light on whether the BoE is confident enough to be cutting rates later this year. This probably should be seen as a negative event risk for Sterling.