GBP STIRs Off Post-CPI Extremes, Still Less Than 40bp Of '24 Cuts Priced

GBP STIRs have bounced from post-CPI hawkish extremes alongside the modest recovery in gilts.

• As we flagged earlier, late Tuesday comments from BoE Governor Bailey, the low (by recent standards) absolute level of cuts priced in for ’24 and softer energy prices have probably factored into the move.
• SONIA futures are flat to -4.0 through the blues.
• ~39bp of cuts are priced through ’24 on the whole, after a fresh ’24 low sub-35bp was registered this morning.
• Meanwhile, the first 25bp cut is fully discounted come the end of the Nov MPC, with ~88% odds of a cut priced through the end of the Sep meeting.
• Comments from BoE’s Bailey & Haskel are due later today,
• Today has already seen their MPC colleague, Greene, sound a little more balanced than her hawkish offering in the FT last week.