Nordea FX Strategy Research discusses GBP outlook in light of last week's BoE rate decision.
"Bank of England hiked rates last week, but it was not the only thing that was hiked. Also, the front-end of the inflation forecast from Bank of England was hiked, while the end-point of the forecast was only lowered by 0.07% despite the rate hike. Moreover, Bank of England scrapped the wording that rates could be hiked more than current market pricing.
Nevertheless,, as Bank of England likely underestimates the negative impulse from FX effects, while the UK housing market provides another reason for concern," Nordea argues.