No change from the BoE but Sterling and UK market interest rates nudged higher after two members of the Monetary Policy Committee continued to vote for a 25 bps rate hike.

We doubt GBP needs to embark on a major rally, however, given that we think UK inflation will ultimately play catch-up with the disinflation trends seen in the US and the Eurozone.

We think EUR/GBP can probably trace out a 0.8500-0.8700 range over the coming months, while a strong Dollar environment can keep GBP/USD near the 1.2600/1.2700 region this quarter.