Quintet Private Bank: The outlook for the British pound depends on the Bank of England's future rate hike potential.

(1) Daniele Antonucci of Quintet Private Bank stated in a report that, following the Bank of England's decision on Thursday to raise interest rates by 25 basis points to 4% with an 8-1 vote, the outlook for the pound depends on the Bank of England's scope for further rate hikes. (2) He noted that for the pound, the key question now is whether the Bank of England will ultimately need to tighten policy much more than other major central banks, which seems unlikely at this stage. (3) He said the Bank of England faces a difficult balance: insufficient tightening could allow external energy shocks to trigger persistent domestic inflation, while being too aggressive risks unnecessarily weakening demand. (4) The pound fell 0.1% to $1.3459, reversing earlier gains.