Bank of England's Tightening Cycle to End on Thursday, GBP to Feel the Weight - Morgan Stanley 🏦🛑

Morgan Stanley's economist predicts the end of the Bank of England's tightening cycle ik, a move that could put pressure on GBP, given the approximately 66bp of hikes priced for the Monetary Policy Committee. The bank sees risk sentiment as a key driver for GBP, with a softening global narrative likely to push the currency lower in line with risk appetite.

Inflation and High Rates May Further Weaken UK Growth Outlook  📈📉

With inflation remaining elevated due to sticky core CPI and wage growth reflecting minimum wage increases, and relatively high rates, Morgan Stanley anticipates these factors may further weaken the UK's growth outlook. The effect could be particularly significant as more mortgage rates reset at higher levels.