The GBP/SEK currency pair held in proximity to a 2-week high of 12.5111 on Tuesday ahead of the outcome of the Bank of England’s policy meeting.
The Bank of England is expected to leave its benchmark interest rate intact at 3.75% at its April 30th meeting.
In March, the BoE highlighted global energy price risks from the Middle East conflict and stressed readiness to act to maintain 2% CPI inflation in the medium term.
Inflation projections showed potential increase to around 3% in Q2 and up to 3.5% in Q3.
Data by the Office for National Statistics showed that the UK Consumer Price Index had risen 3.3% year-on-year in March. It followed two consecutive months of 3% annual inflation and underscored the inflationary impact of the Middle East war.
Yet, BoE Governor Andrew Bailey noted that spare economic capacity could help contain inflation.
Although the central bank opted to leave interest rates unchanged, its March communication was perceived as more hawkish than markets had anticipated. Rate hike expectations for later this year have risen after the March announcement.
Meanwhile, SEK traders will be paying close attention to Sweden’s preliminary GDP growth figures for Q1 due out on Wednesday.
The GBP/SEK currency pair was last up 0.25% on the day to trade at 12.5080.
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