GBP Faces Selling Pressure as BoE Interest Rate Decision Looms

The British Pound (GBP) saw selling pressure despite the UK's Consumer Price Index (CPI) report showing inflation at 3.1% Year-on-Year, in line with expectations.

The CPI rose to 0.5% on a monthly basis, faster than the previous reading of 0.3%. This acceleration in inflationary pressures is expected to prompt expectations of an interest rate hike by the Bank of England (BoE) in the near term.

The BoE's decision on Thursday is closely watched, with strategists at Brown Brothers Harriman (BBH) anticipating a sixth straight meeting with no change in policy rates. However, Megan Greene, Catherine L Mann, and Huw Pill are backing a 25bps hike.