The Sterling trade-weighted index is only marginally weaker since the Bank of England 'only' hiked by 25 bps last Thursday. Economists at ING analyze GBP outlook.

Upside bias in EUR/GBP into year-end

We look for one more hike to 5.50% in the Bank Rate (probably at the September meeting) before the BoE is prepared to go into a formal pause. This all points to a range-bound sterling over the next couple of months, but we retain an upside bias in EUR/GBP into year-end.

For Cable, we see 1.2590/1.2620 as important support and what should be the lower boundary of this week's range.