Rabobank Sees Pound Weaken to 1.32-1.33 as BoE Avoids Rate Hike

Rabobank's latest forecast for the GBP/USD exchange rate predicts a near-term decline to 1.32-1.33 over the next one to three months. The bank argues that markets have already tightened UK monetary conditions, pricing further rate increases and pushing borrowing costs higher.

This has led Rabobank to suggest that the Bank of England (BoE) may continue using hawkish language while avoiding an actual increase in policy rates.

The BoE's recent decision to maintain Bank Rate at 3.75%, despite three policymakers voting for an immediate increase, reinforces this possibility.