The Bank of England raised rates for the twelfth consecutive time on Thursday, to 4.5%  and the highest level since 2008. It has delivered 440 basis points worth of hikes sine the December 2021 lift-off, to combat high inflation, which stayed above 10% in March.
Although the Committee expects CPI to fall sharply from April, it sees risks as "skewed significantly to the upside" and actually raised its forecast. It also lowered its projections for unemployment and upgraded those for economic growth, not expecting a recession anymore.
Although the BoE did not provide guidance around future moves, these forecasts and the fact that they are based on 4.75% interest rate by the end of the year (from current 4.5%), show that there is room for more monetary tightening. Speaking on Bloomberg after the decision, Governor Bailey said that policymakers are "approaching" a point when they should be able to "rest". 
High cost of living and prospect of more rate increases can weigh on UK100 and send it to lower lows towards 7.654-23, as it runs a losing month so far. Such moves would bring 7,420 in the spotlight, but this looks like a tall order.
On the other hand, the BoE seems to be close to its peak rate (if not there yet) and the UK economy has generally performed less bad than feared, with the bank's updated projection alluding to that. This can help UK100, which despite the initial pressure after Thursday's decision, shows resilience.
The index managed to defend the critical 38.2% Fibonacci of the March low/April high advance and as long the correction is limited to this level, it can push for 7,933 and will have the opportunity to challenge the record highs (8,052) form earlier this year.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 14 May 2023 https://www.bankofengland.co.uk/monetary-policy-report/2023/may-2023