The British pound’s substantial gains last week were primarily the result of the hawkish commentary contained in the minutes from the Bank of England’s policy meeting in May. However, the forex markets have a notoriously short-term memory, and traders could rapidly go from pondering the implications of an inflation-focused Monetary Policy Committee to weighing the risks associated with the sharp slowdown in the UK housing sector. In fact, BBA mortgage approvals on Tuesday and Nationwide house prices on Thursday are both expected to reflect waning demand for residential homes in the UK. Furthermore, GfK consumer confidence is anticipated to drop even lower to a nearly 26-year low of -25. While the Bank of England is unlikely to budge from their hawkish stance given rapid acceleration in inflation growth and persistant upside risks, the clear deterioration in economic activity in the UK may start to appear frighteningly similar to that of the US, and this sentiment could start to weigh on the British pound.