Measured against the EUR, the Pound has inched higher to levels last seen in December last year. Economists at Rabobank have revised their GBP forecast modestly higher.

GBP could begin to falter despite the higher rate environment

If the market begins to assess that the Bank may have to push the economy into recession into order to push CPI inflation back to 2%, GBP could begin to falter despite the higher rate environment. 

We have revised our one-month EUR/GBP forecast to 0.86 from 0.87. However, we still see risk of EUR/GBP 0.90 on a 12-month view.