Bank of England (BoE) Governor Andrew Bailey has expressed skepticism over cutting interest rates this year. The official effectively endorsed maintaining the status quo, ruling out any imminent monetary easing. On top of that, Bailey emphasized the need for caution, noting that «there is now considerably more doubt about exactly when and how quickly we can make those further steps». Deputy Governor Claire Lombardelli shared his sentiment, suggesting rates may remain slightly below the current 4% level due to persistent inflation, particularly in the services sector.
In line with these comments, the BoE is set to slow its rate-cutting cycle from the pace it has maintained since August 2023, shifting to a quarterly easing rhythm. Following the narrow 5–4 vote in August to reduce borrowing costs by 25 basis points, markets have significantly lowered expectations for another move this year, pricing in less than a 20% chance in November.
Inflation, which fell from double-digit peaks in 2022, has risen again this year, adding twice from a low of 1.7% in September 2024 to 3.8% in July, largely driven by food and energy prices. The BoE anticipates the CPI to hit 4% in September.
Holding rates steady and moderating the pace of monetary easing will support GBPUSD. Technically, the pair is currently testing resistance; however, a pullback is likely to gain traction before another bullish breakout attempt.
The overall recommendation is to buy GBPUSD from 1.34350. Profits are taken at the 1.36800 level. Stop loss is placed at 1.33250.
The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
