Markets await next week’s Bank of England (BoE) decision. Economists at Scotiabank expect GBP losses to resume to below 1.24.

A firm and longer-lasting drop under 1.25 seems likely 

“The bank is likely to hike by 25bps but it looks set to accompany this with a cautious economic outlook and implicit guidance that market pricing seeing 150bps in hikes by year-end is significantly out of line – as this would result in a notable undershoot in inflation.

“There’s very little possible upside for the GBP from this meeting and considerable downside as the bank strikes a much more neutral to even dovish tone than markets are reflecting in rate bets.”

“A firm and longer-lasting drop under 1.25 seems likely and with it a test of 1.24 with continued weakness below this mark also a possibility.”