Bank of America Global Research maintains a structural bearish bias on GBP over the coming months.
"GBP price action following the BoE meeting this week indicate that markets see the BoE at or close to the terminal rate, which fits our priors. However, the UK rate outlook has played little role in GBP pricing for some time. The BoE decision tells us more about the contours of the UK economy, which continues to be hamstrung by structural difficulties. Indeed, admission that the long run impacts of Brexit had fed through much faster than anticipated is clear evidence that the BoE is aware that monetary policy will not be the solution," BofA notes.
"A quicker turnaround in rates (from hikes to cuts) than other central banks and a level of acceptance that the UK is in a unique situation compared to its peers is therefore likely. We maintain a bearish view on GBP," BofA adds.