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BoE pivots towards rate cuts but timing of first cut remains unclear

• BoE leaves policy rate on hold for 4th consecutive meeting at 5.25%.
• The BoE’s updated guidance dropped the bias to hike rates further. Policy focus has shifted to assessing how long rates need to be held at current level.
• However, there was no strong indication that they are likely to lower rates as soon as the UK market is expecting in May.
• The GBP strengthened in response for the second consecutive MPC meeting. It has been benefitting at the start of this year from expectations that the BoE will lag behind the ECB and Fed when starting to lower rates.