• Pound Sterling remains inside Wednesday’s trading range amid an absence of fresh economic indicators.
• Persistent UK inflation would allow the BoE to deliver rate cuts later than other G-7 economies.
• The USD index turns lackluster after a corrective move as investors digest hawkish rhetoric from Fed policymakers.

The Pound Sterling (GBP) trades back and forth in a narrow range in Thursday’s European session due to a lack of fresh economic triggers for a decisive move. The GBP/USD pair turns quiet as traders await commentary from Bank of England (BoE) policymaker Catherine Mann for more guidance on future interest rates. If interest rates remain high in the UK compared to counterparts, GBP will likely be bullish as higher interest rates tend to attract greater foreign capital inflows.

On Wednesday, BoE Deputy Governor Sarah Breeden joined Chief Economist Huw Pill and said that the central bank is now focusing on the length of time that interest rates are required to remain at current levels. 

In the last monetary policy statement, BoE Governor Andrew Bailey also said the longevity of higher interest rates depends upon upcoming data. 

Apparently, BoE policymakers are gradually considering exiting from ultra-hawkish interest rates. However, the time period required for shifting to an easy monetary policy by the BoE is likely to be much longer than the Federal Reserve (Fed) and the European Central Bank (ECB) due to significant differences in wage growth momentum.

The Pound Sterling is expected to face volatility as BoE policymaker Catherine Mann is scheduled to speak at 15:00 GMT on Thursday. Mann is expected to maintain the hawkish rhetoric as she was one of the two of nine policymakers who voted for an interest rate hike by 25 basis points (bps) in the monetary policy meeting held on February 1.