Sterling Digest, April 22 2012: double-dip risks

GDP projection based on market interest rate expectations and £325 billion asset purchases
Large risk here of a double-dip

The Bank of England is sounding very hawkish with commentary from both Adam Posen (uber-dove) and Andrew Sentance (uber-hawk) featured today. However with double-dip calls coming out of the UK, the market is already looking ahead to Wednesday’s UK GDP release. Currently hawkish sentiment will drive an already rallying sterling higher into the release. However, the risk of a contraction could see sterling tumble severely on disappointing data.

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