Sterling ended up taking a slight hit following the BoE interest rate decision at mid-day. Despite the overall decision to keep rates unchanged as expected, we saw two of the nine voting members vote in favour of cutting rates this month, with originally only one member anticipated to do so. This saw sterling take a light dip, with GBP/USD initially dropping half a cent.

As a result, the bets for a June rate cut rose, now priced in slightly more than 50%, with an August cut fully priced in on the markets. The BOE has also lowered its inflation forecasts, seeing inflation at 2.6% in one year's time (previously 2.8%), 1.9% in two years' time (previously 2.3%), and Bailey reinforced this by expressing his optimism that inflation looks to be going in the right direction.

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