GBP: Mansion House speech, IP and manufacturing data to weigh on sterling

In a relatively light week, BoE Governor Carney's Mansion House speech and April IP and manufacturing data will likely weigh on GBP.
 
Governor Carney is likely to reiterate the relatively cautious tone of the recent May Inflation Report, particularly in the context of recent disappointing data, market volatility and continuing Greek political uncertainty. 

The May Inflation Report incorporated downward revisions to the Bank's GDP growth forecasts, and in the subsequent press conference Governor Carney indicated that tight fiscal policy and uncertainty regarding an EU referendum will likely act as headwinds to growth. 

Barclays notes:

• We recently pushed back our expectation of the first rate hike to Q1 2016 from Q4 2015, and the subsequent pace of rate rises to 25bp per 6 months from 25bp per quarter previously. 
  
  
• In the case of IP, we expect a 0.3% m/m decline in April (consensus: +0.1% m/m). The decline is likely to be broad-based across components.
  
  
• We also expect manufacturing to contract by 0.2% m/m (consensus: +0.1% m/m).