In the near term, today’s BoE policy decision could trigger a further correction lower for the Pound if the MPC disappoints market expectations for a larger 50 bps hike to regain with inflation fighting credibility. The BoE could though stick to the gradual path of 25 bps hikes today but signal that it will assess in more detail the need for a larger hike in August when the next Monetary Policy Report is released.
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