BoE could hint that interest rates have now peaked
The BoE has often seemed hesitant over the past months and has ultimately only reacted to inflationary pressures. It is therefore quite possible that it will announce a surprise rate pause while keeping the possibility of a rate step later in the year open. However, we assume that the BoE is more likely to take another rate step while at the same time sounding more dovish. It could for example hint that interest rates have now peaked.
If inflation then turns out to be more stubborn after all, Sterling would come under pressure again.