If inflation turns out to be more stubborn, GBP will come under pressure again

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The Bank of England (BOE) will hold a monetary policy meeting today.

The Bank of England may signal that interest rates have now peaked.

Over the past few months, the Bank of England has often appeared hesitant, ultimately responding only to inflationary pressures. Therefore, it is very likely that the Bank of England will announce an unexpected pause in interest rate hikes while retaining the possibility of raising interest rates later this year. However, we think the Bank of England is more likely to raise interest rates again while appearing more dovish. For example, the Bank of England may signal that interest rates have peaked.

If inflation ends up becoming more stubborn, the pound will come under pressure again.