This week's highlight will be the Bank of England meeting on Thursday. Economists at ING expect the “Old Lady” to revert to a 50 bps hike with the GBP/USD pair moving below the 1.23 mark.

BoE to hike 50 bps this week

“We expect the BoE to revert to a 50 bps hike (55 bps hike priced) as it tries to balance high inflation against growing evidence of a prolonged downturn - with little signs of stimulus.”

“Our game plan assumes that GBP/USD struggles to hold any gains over 1.23, while EUR/GBP should find support in the 0.85/0.86 area.”

“A winter of discontent should see Sterling underperform should central bankers need to keep rates tight(er) into a recession.”