The GBP/SEK currency pair pulled back from a 14-week high of 12.5408 on Tuesday ahead of the outcome of the Bank of England’s and Sweden’s Riksbank policy meetings.
The Bank of England is expected to leave its benchmark interest rate intact at 3.75% at its March 19th meeting.
BoE’s February decision to hold rates was a narrow 5 to 4 vote, as officials weighed easing inflation pressures against risks stemming from a weakening economy. Four members voted in favor of a 25 basis point cut, which highlighted growing divisions within the Monetary Policy Committee.
BoE policy makers said that risks of persistent inflation had decreased, while weaker demand and a softening labor market posed downside risks.
The MPC indicated that further rate cuts were likely, but they would depend on incoming inflation figures. BoE Governor Andrew Bailey expressed confidence that inflation would reach the 2% target sooner than previously thought.
Meanwhile, Sweden’s Riksbank is expected to leave its key policy rate intact at 1.75% at its March 19th meeting.
Policy makers had indicated that borrowing costs would likely remain at this level for some time, as they assess the impact of the current policy stance.
Still, Riksbank warned that uncertainty over inflation and growth had risen, driven in part by geopolitical tensions and shifts in US trade and foreign policy.
The GBP/SEK currency pair was last down 0.19% on the day to trade at 12.4148.
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