FXStreet reports that economists at MUFG Bank weigh up market impact from BoE policy update.

“The overall message from the BoE is that rate hikes could start sooner but the scale of the hike cycle should be only modest and the pace gradual. It has helped to dampen upside for the pound as the BoE moved a step closer to tightening policy yesterday.”

"Recently we have become more confident in our bullish outlook for the pound on the back of encouraging COVID developments in the UK. We are maintaining a short EUR/GBP trade idea in anticipation that the pair will fall to fresh year to date lows. Policy is set to diverge as the BoE moves closer to raising rates while the ECB has signalled strongly it does not plan to raise rates over their forecast horizon by setting a higher hurdle for future rate hikes in their new forward rate guidance.”