The Pound Sterling experiences sales pressure after the Bank of England (BoE) decides to keep interest rates steady at 4%. Out of nine Monetary Policy Committee members, four propose a 25-basis-point reduction, while three oppose.<\/p>\n
BoE indicates risks to inflation are declining and weak demand may affect short-term inflation. BoE suggests more interest rate cuts could occur if price pressures decrease further.<\/p>\n
The British Pound weakens against major currencies, notably the Japanese Yen. The GBP\/USD has a slight rise to 1.3070 as the US Dollar’s rally pauses.<\/p>\n
Recent US data, including 42,000 new jobs in October and an ISM Services PMI of 52.4, supports the US Dollar. Expectations for a Federal Reserve rate cut in December decrease from 94.4% to 62.5%.<\/p>\n
The GBP\/USD remains near 1.3085, holding a six-month low around 1.3000. The pair’s trend is bearish, below the 200-day Exponential Moving Average at 1.3263.<\/p>\n
The 14-day Relative Strength Index falls under 30, signalling a bearish trend. Key support is seen near April\u2019s 1.2700, while the October 28 high at 1.3370 poses resistance.<\/p>\n
BoE interest rate decisions, typically eight per year, impact Pound Sterling based on their inflation outlook approach.<\/p>\n
Today’s Bank of England decision is a clear signal for us to anticipate a weaker Pound Sterling. The vote to cut rates was much closer than we expected, with four out of nine members already pushing for a reduction. This dovish shift suggests the path of least resistance for Sterling is downwards in the coming weeks.<\/p>\n
This pivot from the BoE is supported by recent data showing slowing inflation and economic activity. We saw in the third-quarter GDP figures that the UK economy grew by a mere 0.1%, while the latest Office for National Statistics data from mid-October 2025 showed the headline CPI rate fell to 4.2%. These figures give the central bank more room to prioritize growth over fighting inflation, reinforcing the case for lower rates.<\/p>\n
We should also be positioning for further Sterling weakness ahead of the Autumn Budget later this month. Expected tax hikes from Chancellor Rachel Reeves will likely act as a drag on consumer spending and business investment. This fiscal tightening runs contrary to what the economy needs, adding another layer of bearish sentiment on the pound.<\/p>\n
The case for shorting GBP is strengthened when we look at the United States, where the economic picture is more robust. The most recent US Non-Farm Payrolls report, released just last week for October 2025, showed a solid addition of 195,000 jobs, keeping the Federal Reserve on a more cautious path. This policy divergence between a dovish BoE and a steady Fed makes shorting the GBP\/USD pair particularly attractive.<\/p>\n
For derivative traders, this suggests buying put options on GBP\/USD or establishing bearish futures positions. The pair is already trading below its 200-day moving average, and with the RSI showing bearish momentum, the technicals align with the fundamental view. We are looking at the April 2025 low near 1.2700 as a logical first target for these positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Pound dips as BoE holds rates; inflation risks ease, Fed rate cut expectations decline, GBP\/USD remains bearish.<\/p>\n","protected":false},"author":62,"featured_media":17030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-34218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t