GBP to witness a short-term boost if BoE is more hawkish than the market anticipates – Crédit Agricole

Economists at Crédit Agricole analyze GBP outlook ahead of the Bank of England (BoE) policy meeting on Thursday. 

Limited upside for the GBP unless the BoE provides a hawkish surprise

UK rate markets are currently forecasting a rate hike of more than 25 bps in the upcoming BoE meeting. This expectation means that many of the potential positives of such a rate increase may already be factored into the GBP’s current price.

Given the current market expectations, for the GBP to witness a short-term boost, the MPC would need to deliver a policy decision or statement that is more hawkish than the market anticipates.