Although the rate hike was already priced in, the comments from BOE policymakers saw the pound drop by around 2%. The central bank warned that the situation regarding growth and the economy is ‘very challenging and that although the recession will not be the deepest recession seen, it will likely be the longest, running into 2024.
GDP is expected to decline around 0.75% over the second half of 2022 and unemployment is expected to double to around 6.5% over the next 15 months.
The pound took a hit after the announcement and fell around 2% to 1.1150 against the dollar and 1.1450 against the Euro.
US unemployment claims remained at historic lows despite recent economic cooling. Claims actually dropped by 1000 to reach 217,000, lower than the consensus of 220,000
The main data and events today include ECB President Lagarde's speech at 09.30 am, BOE Policymaker Pill's speech at 12.15 and US Employment data including Nonfarm payrolls which are expected to show a negative decline to 200k from the previous month's figure of 260k.
GBPUSD currently resides at 1.1217
GBPEUR currently resides at 1.1470
EURUSD currently resides at 0.9780