Bank of America Global Research previews the July BoE meeting on Thursday.

"We expect the Bank of England (BoE) to keep the Bank Rate on hold at 3.75% this Thursday (7-2 vote with Pill and Greene voting for a hike with a high risk of a 6-3). We expect the overall message to be balanced. We expect the MPC to keep the door kept open to a hike, but don't expect it to give a strong signal about an imminent hike either, given uncertainty and limited second round effects so far. But the recent rise in energy prices imply that risks are tilted to a hawkish tone. But we also think the MPC could push back against market pricing, which is currently pricing close to three hikes," BofA notes.

"Ongoing momentum squeeze is likely to be the pervasive driver for GBP in the short-term. The BoE should therefore not unduly impact the pound against this backdrop. Indeed, any rally will likely be seen as an opportunity to sell," BofA adds.