Ella 
Today’s BoE rate decision saw wild swings in expectations.
EUR/GBP headed towards 0.8450
Given the correction that has taken place, we would be surprised to see a very negative reaction in GBP if the central bank raises rates by just 25bps.
It may take an exceptionally dovish BoE inflation report and/or dovish comments from Governor Bailey to do more damage, which is hard to see as the BoE is still struggling to explain its initial Why the forecast is so off target.
Meanwhile, if the BoE does raise rates by 50bps, markets may be misled by the recent sharp cut in UK rates and may need a final rate closer to 6.00% to be priced in again.
Given this asymmetry, we tend to stick with our view and continue to call for EUR/GBP to move towards our 0.8450 target, which is also supported in a low-volatility market environment.
