According to currency specialist HiFX, the outcome of yesterday’s meeting, far from being fully priced into sterling, should allow room for the pound to appreciate a little in the coming months.

Marc Cogliatti, currency strategist at HiFX, says, ‘The opportunity for sterling to strengthen over the next couple of months will come as a welcome relief to UK importers who have had to contend with rising commodity prices (in particular record oil prices) as well as the recent weakness of sterling.

‘In light of huge increases in pipeline inflation and reports of rising prices in many sectors, the Monetary Policy Committee has chosen to maintain a gradual approach to monetary easing, avoiding back-to-back cuts for fear of de-anchoring inflation expectations. Nevertheless, with risks to the economy still focused on the downside, the market is pricing in further cuts in the months ahead.

While consumer inflation remained steady at 2.5 per cent in March, pipeline inflation continues to pose significant upside risks. Input price inflation reached an all-time high in March of 20.6 per cent year on year, driven largely by recent rises in crude oil prices.

Cogliatti adds, ‘We’ve seen further signs of cooling in the housing market (mortgage approvals slumped to their lowest level on record in March) coupled with evidence from the CBI [Confederation of British Industry] that activity on the high street is beginning to wane. The market will look towards the release of the bank's quarterly inflation report next week and minutes from yesterday’s meeting in two weeks to gauge how serious policymakers regard recent inflationary pressures.’