Barclays Research sees the balance of risk-reward shifting towards a softer GBP over the coming weeks.
"Last week’s dovish pivot by the BoE despite acute domestic inflation pressures is shifting the balance of risks in the direction of a still-weaker pound. Even if the MPC ends up lifting rates further, this would likely be in the wake of sticky inflation, and the experience with reactive tightening through 2022 suggests this is no great help for the currency," Barclays notes.
"Accordingly, we see risks to our 0.87 medium-term forecast for EURGBP as skewed to the upside, even as valuations are broadly neutral. The provisional Q4 GDP print stands out on the data docket, while a number of MPC member are due to speak. Last week’s price action also means we stopped out of our long GBP trade recommendation," Barclays adds.