GBPUSD Approaches $1.3 as BoE Signals Caution on Cuts

The British pound gained strength, approaching $1.3, after the Bank of England (BoE) delivered its second 25bps rate cut this year, which met market expectations. Despite this move, the BoE signaled it would proceed carefully with any further rate reductions, stressing the importance of a restrictive approach to monetary policy.

Central Bank Predicts Inflation Rise to 2.5 Percent by Year-End

The central bank expects inflation to increase from 1.7% to 2.5% by year-end. Additionally, it forecasts that recent budget measures could raise GDP by roughly 0.75% at its peak effect within a year, temporarily pushing inflation up by 0.5 percentage points.

• Next read: EURUSD Hits 4-Month Low as Trump Victory Boosts Dollar.

Traders anticipate two more 25bps cuts from the BoE by the end of next year, with a slightly less than 50% chance of an additional cut.

About The Author

Ethan O. Miller

Ethan O. Miller is a seasoned Forex analyst. His insightful articles offer a unique perspective on currency trends, aiding both novice and experienced traders in navigating the Forex market.

See author's posts