Economists at OCBC Bank preview the Bank of England (BoE) and its implications for the Pound.

Buy rumour, sell rally

“Consensus and ourselves are looking for 25 bps hike. Potentially, it could be shaping up to be a buy rumour, sell on fact for GBP. Positive UK story is probably in the price of GBP for now.”

“Markets are pricing in about +65 bps hike for this year, especially after the double-digit inflation print for 7 straight months and the much better than expected labour market report. We opined that market pricing here may be too hawkish.”

“Any hawkish expectations not met could lead to profit-taking on GBP gains this week.”