TD Securities advises selling GBP strength after a 6-3 Bank of England vote split sparked a 0.3% gain in GBP/USD.
The British Pound rose 0.3% against the US Dollar after the Bank of England’s 6-3 vote split, with Catherine Mann joining the rate hike camp. The move aligned with TD Securities’ expectations for a hawkish scenario but lacked broader committee support.
Most BoE members remain comfortable holding rates due to limited second-round inflation effects. Market consensus had not fully priced in the hawkish split, though some forecasters had flagged the risk.
TD Securities recommends fading the GBP rally, citing potential downside from reduced September rate hike expectations. They forecast EUR/GBP retracing toward 0.86 as UK political risk premiums rebuild ahead of the Autumn Budget.