BOE watch: A 25 bps rate hike is now more favoured in August

<p>Earlier this week, the odds for a 50 bps rate hike in August were seen at around 66% but that has now dropped to roughly 41% with a 25 bps rate hike being favoured, with a probability of 59%. That comes after the UK CPI data <a href="https://www.forexlive.com/news/uk-june-cpi-79-vs-82-yy-expected-20230719/" target="_blank" rel="follow">here</a> earlier today.</p><p>Meanwhile, money markets are now pricing a terminal rate of around 5.83% (in February next year) and that is down from roughly 6.04% yesterday. If you're wondering why is it that market pricing can swing so heavily just off of one data point, please do check out my post from yesterday <a href="https://www.forexlive.com/news/will-uk-inflation-data-give-sterling-another-boost-this-week-20230718/" target="_blank" rel="follow">here</a>.</p>

This article was written by Justin Low at www.forexlive.com.