Getting to a 5.75% rate by December as markets are pricing may simply be too slow and the BoE might yet need to start hiking in 50 bps increments again, as it last did in Feb. It’s also the case that GBP could well become and then remain among the highest yielders in G10 space, something which can attract carry-chasing money to the UK at a time of low global asset volatility.
We lower our near-term EUR/GBP target to 0.8450 and raise our GBP/USD target to 1.2800, levels at which we would finally be tempted to take profit if reached quickly.Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.