The Bank of England (BoE) raised its policy rate aggressively at today monetary policy announcement, raising its Bank rate by 75 basis points to 3.00%. The combination of a protracted economic recession and a central bank that under delivers versus the market's rate hike expectations are key factors behind our view of renewed sterling weakness into early 2023, with a targeted GBP/USD exchange rate of $1.0600 by the end of the first quarter next year.

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