GBP/USD: Hawkish BoE hike may keep Cable in the ascendancy – SocGen

GBP/USD resumed trading above 1.26. Economists at Société Générale expect Cable to remain elevated on a hawkish Bank of England (BoE) this week. 

A three-way split with some members renewing their call for 50 bps is not ruled out

“A hawkish 25 bps rate increase this week by the BoE could keep Sterling support and defy bearish seasonal trends.”

“A three-way split with some members renewing their call for 50 bps is not ruled out after above forecast wage and inflation data last month.”

“We forecast +25 bps to 4.50% and will review their call for the terminal rate of 4.50% after the meeting.”