The Bank of England (BoE) is set to announce its rate decision on Thursday at 12:00 GMT. The clear majority of analysts expect the “Old Lady” to hike its key rate by 25bp. But a possible 50 bp hike could lift the pound, economists at Commerzbank report. 

Sterling might temporarily ease if there is no hawkish surprise

“If the BoE were to surprise with a 50bp step after all that would be positive for sterling, just as a hawkish smaller step would be.”

“If there is no hawkish surprise sterling might temporarily ease, in particular against the euro losses are likely to be limited though. An active BoE and a hesitant ECB support sterling for now.”

See – BoE Preview: Forecasts from 10 major banks, eyeing a hat-trick caught between a rock and a hard place