Anna 
In Thursday’s London session, the Pound Sterling (GBP) demonstrates resilience, buoyed by investors’ heightened risk appetite and a weakened appeal for the US Dollar (USD) following the Federal Reserve’s (Fed) decision to maintain its forecast of three rate cuts for the year.
The GBP/USD pair experienced a robust rally as market participants awaited the Bank of England’s (BoE) interest rate decision. The BoE is widely expected to maintain interest rates at 5.25%, given the United Kingdom’s core Consumer Price Index (CPI) growth, which exceeds the policymakers’ target rate of 2%. Investors keenly anticipate signals regarding the timing of potential rate cuts, with expectations leaning towards a reduction in borrowing rates at the August policy meeting.
Market sentiment suggests that the BoE’s guidance on interest rates may lean towards a slightly dovish stance, particularly as price pressures experienced slower growth than anticipated in February. Annual headline and core inflation figures softened to 3.4% and 4.5%, respectively, with the UK Office for National Statistics (ONS) attributing this trend to declines in food and restaurant prices, offset by increases in motor fuel costs.
All eyes are on whether recent subdued inflation data has influenced the perspectives of Monetary Policy Committee (MPC) members Catherine Mann and Jonathan Haskel. Despite the majority of the MPC opting to maintain rates at 5.25% in the past four policy meetings, both Mann and Haskel have consistently voted in favor of further interest-rate hikes, adding an element of intrigue to the upcoming BoE decision.
