Pound Could Weaken Further on Hawkish Fed: BOE's Mann

The video discusses the impact of inflation on the UK economy, emphasizing the role of imports and capital flows. It highlights the importance of spillovers and capital flow stability. The speaker refrains from discussing fiscal policy but notes the hawkish tone of the Federal Reserve and ECB, questioning how much of this is priced into the pound. The potential for depreciation pressure on the pound is also considered.

What factors affect the UK economy as a small open economy?

What is the significance of capital flows in relation to the pound?

How does the hawkish tone from the Federal Reserve impact the pound?

What does it mean if the hawkish tone is already priced into the pound?

What potential effects could occur if the hawkish tone is not fully priced in?