GBP/USD could reach the 1.2250 area if the BoE does not soften its tone – ING

Economists at ING analyze GBP outlook ahead of today's Bank of England (BoE) policy statement.

Sterling to stay relatively well supported if the BoE does not soften its tone

The Bank Rate is widely expected to be left unchanged at 5.25%. The focus will also be on the vote split. 6-3 would seem to be the most likely.

Assuming that the BoE does not soften its tone today – i.e., it does not provide fresh ammunition to pricing of rate cuts next year – we would expect Sterling to stay relatively well supported. This could see GBP/USD push up the 1.2250 area, while EUR/GBP could press support at the 0.8670/0.8680 area.