The pound edged up against the euro on Thursday after Bank of England (BoE) policymakers, including Chief Economist Huw Pill, reiterated policy will need to remain restrictive for some time.

"We need a persistent level of restriction over the next extended period," Pill said.

Earlier this week, Pill had said market pricing pointing towards a first interest rate cut in August 2024 "doesn't seem totally unreasonable".

But on Wednesday, BoE Governor Andrew Bailey reiterated that monetary policy would need to remain restrictive for an extended period.

"It's really too early to be talking about cutting rates," Bailey said.

Against the euro , sterling was up 0.05% to 87.12 pence, but still some way from the three-week high of 86.50 hit on Monday.

The pound was last down 0.2% against a strengthening dollar at $1.2259, and off a near two-month high of $1.2428 touched on Monday.

"Yesterday witnessed BoE Governor Bailey pour a degree of policy cold water on the previous assessment from Chief Economist Pill regarding market pricing for a BoE cut as early as August," said Jeremy Stretch, head of G10 FX strategy at CIBC.

Sterling will likely weaken towards the levels seen in October against the euro and move back towards $1.2220 against the dollar as UK GDP data on Friday could show consumers remain reticent to spend amid a moderating labour market, Stretch added.

"We remain mindful of the risks of consumer fragility," he said.

Source : Reuters