** The Bank of England is due to release its Quarterly Inflation report at 10:30 GMT
** In the November Bulletin, the BoE set a 7% unemployment threshold and expected a 2015 first hike
** A stark deviation between market and central bank rate expectations exposes the pound to the update
The British pound has gained ground against all of its counterparts since Mark Carney took over the BoE (July) and since the bank introduced forward guidance (November). Interest rate expectations have played a particularly large role in the sterling's run to this point. This run does not come without fundamental controversy, however, as the market's timeframe for a hike seems to contrast significantly from the BoE's guidance. This has led to serious contention and its resolution can in turn generate severe volatility as well as dictate the pound's trend from here. We discuss this important event risk and its potential GBP trade implications in today's Strategy Video.