Lower Still As BoE Leaves Rates Unchanged

GBP lower as the BoE leaves policy rates unchanged.

• A reminder that market leant into the likelihood of a hike pre-decision, with most economists expecting the BoE to hike (albeit with that view becoming heavily caveated post-CPI).
• The combination of August CPI data, a loosening labour market and business sentiment presented the main drivers to leave rates unchanged (in a 5-4 vote).
• The Bank also decided to rundown the APF by GBP100bn in the 12 months from October, in line with our own expectations.
• Note that the Bank did not suggest that the rates are close to/at peak and remained open to further tightening if inflation pressures prove more persistent.
• Cable troughed at $1.2239, before recovering to the $1.2270 mark at typing. The April 3 low has given way, with the next technical support level seen at $1.2227, a Fibonacci projection.
• Meanwhile, EUR/GBP topped out at GBP0.8694, with key trendline resistance (GBP0.8681) breached, before a retracement to GBP0.8675. GBP0.8701, the July 19 high, now provides the next upside focal point.