GBP Slides as US Rate Hike Bets Rise on Warsh's Inflation Focus

The British pound slid against the US dollar on Friday after Federal Reserve Chair Kevin Warsh emphasized inflation, which boosted market expectations of a potential rate hike next month. The GBP/USD exchange rate dropped to 1.3538, down 0.40%, as the shift in US policy supported the dollar.

Later, the pair stabilized near 1.3590 in early European trade and around 1.3600 in Asian hours, as attention turned to the Jackson Hole monetary policy symposium in the US. Expectations for a Bank of England rate increase were reduced, with money markets pushing back the projected timing from late 2026 to early 2027.

The backdrop also included softer Brent crude prices, which eased near-term inflation pressures and contributed to the reassessment of UK rate prospects.