Election result gives green light to August BoE rate cut – GBP to drift lower

This (in brief) from ING rapid response to the UK election results, based on the exit polling:

• Election result gives green light to August rate cut
• Markets are pricing a 60% chance of an August rate cut, and we think that’s too low
• watch out for comments from BoE rate-setters next week, which might seek to boost expectations for an August cut
• Don’t forget that some policymakers thought the decision was finely balanced at the most recent June meeting, and the BoE has played down recent upside surprises to inflation
• We expect three rate cuts this year, starting in August
• Bank of England policy plans remain the most important domestic driver for the pound
• Our call remains for a move to 1.25 in Cable and to 0.86 in EUR/GBP on the back of Bank of England easing this summer

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Sterling update, barely moved:

The Bank of England next meet on August 1.

After that the balance of 2024 meetings:

• September 19
• November 7
• December 19

This article was written by Eamonn Sheridan at www.forexlive.com.