The implications of activity data on the Bank of England’s policy outlook are not too deep. The focus remains on inflation (especially on services) and wage growth, and it does not seem likely that the BoE will turn significantly more hawkish only based on softer growth and without having reassurances on the inflation side first.

The Pound seems to mirror this narrative, declining only modestly after GDP numbers on Thursday and gaining a little bit today. Still, we like the chances of a stabilisation first (0.8500 may be the bottom), and a rebound then in EUR/GBP, on the back of monetary policy mispricing in the UK and the Eurozone.