The Bank of England (BoE) hiked its policy rate by 25 basis points but he policy statement revealed a cautious stance on future rate hikes. Economists at ING expect the GBP/USD to stall ahead of the 1.32/33 area.

BoE blinks

“Unlike the Fed, the BoE delivered a cautious 25bp rate hike, with one dissenter voting for unchanged rates. The market removed roughly one 25bp hike from its expectations this year (Bank Rate now priced at 1.90% in December).”

“Given we strongly favour the dollar this summer, levels near 1.32/33 in cable may be the best for some time.”

“EUR/GBP stalled at 0.8450/80 resistance yesterday and we still prefer the pair trading back to 0.83.”