There is guaranteed to be high volatility surrounding the Bank of England policy decision. There is also a very strong probability of some action being taken, but there is a high degree of uncertainty over the outcome. An isolated move to cut interest rates to 0.25% would be more than priced in and Sterling would be liable to actually strengthen with falls for gilts and equities. A bigger reliance on direct measures and eventual fiscal easing would also tend to support Sterling and equities with gilts weakening. A much more aggressive monetary stance including big asset purchases would push Sterling sharply lower ... (full story)