And the remaining odds? Well, they are siding with a 50 bps move instead. Keep in mind, that those odds were roughly flipped at one point yesterday after the hot UK inflation data as seen here.

As such, a 25 bps move will be disappointing for those expecting a more hawkish move by the BOE. However, there is perhaps some cushion if the Bailey & co. tees up a more hawkish rhetoric ahead of August.

Right now, there is roughly 67 bps worth of rate hikes priced in over the next two meetings. That suggests the possibility of one of the two meetings (today and August) to be one where there might be a potential 50 bps rate hike. So, if policymakers are talking up a hawkish game, the disappointment for pound bulls will not be so bad.

On the flip side, if the BOE delivers a surprise today and raises the bank rate by 50 bps to 5.00%, then that will be massively disappointing for those betting on a more timid policy approach. In turn, that is likely to see a quick jump in UK rates and sterling while stocks will suffer quite a blow I would say.

This is the evolution of the OIS rates curve for the BOE bank rate before the CPI figures yesterday and what it is ahead of the BOE today:

BOE OIS

As mentioned yesterday, traders are seeing rates to be higher for longer and the peak for the bank rate priced in is at 5.93% in March 2024. That is up from the 5.83% earlier this week but at least it is toned down from the 6.01% right after the CPI figures this week.