GBP to weaken further – MUFG

Economists at MUFG Bank analyze GBP outlook ahead of the BoE’s policy update.

GBP  to see a temporary bounce if the BoE does not signal as strongly as expected that they are unlikely to hike rates further

There is likely to be another divided vote to leave rates on hold today. 

We still expect the Pound to weaken further as the UK rate market moves to price in more BoE cuts into next year, but are wary of the risk of a temporary bounce today if the BoE does not signal as strongly as expected that they are unlikely to hike rates further.