The BoE hiked its official bank rate by 50bps is 2.25%. Three of the nine MPC members voted for 75bps, with one member preferring a 25bps move. Furthermore, the central bank expects an 11% inflation rate in October, which is reduced from 13%. However, the bank statement maintained, “should the outlook suggest more persistent inflationary pressures, including from stronger demand, the Committee will respond forcefully.”

Sterling remains weak, with GBPUSD trading between the blue and red bands in its soft channel. Moreover, its momentum is biased to the downside, with the stochastic maintained in its lower quintile (green rectangle).

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