GBP/USD, EUR/GBP flows: BOE Not More Hawkish

GBP lack of reaction reflects that money markets have trimmed rate hikes by 4-6bps, with a move mostly discounted for June but only fully for July.  Key points from the statement are the emphasis that a weak economy and soft labor market could curb 2nd round effects, but Bailey appears open to tightening.  In his thoughts in the minutes he noted that "I place most weight on Scenario B, albeit with slightly reduced second-round effects".  This sounds like a willingness to hike if the prospect of 2nd round effects grow, which is a function of energy prices multi month and when the Straits of Hormuz reopens.