Today, the BoE kept its monetary policy unchanged as expected.
The BoE left the door open for more easing later this year if data meet expectations of the August projections. However, the BoE signals that the probability has declined, as near-term indicators have been better than expected.
We expect the BoE to cut by 15bp from 0.25% to 0.10% in November, but it is a close call and will be data-dependent.
Market is currently pricing in a 6bp rate cut at the November meeting and 11bp in total in a year's time.
We expect EUR/GBP to trade higher in coming months due to BoE easing, the large current account deficit and political uncertainty.
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