GBP Tumbles Below 200-Day Average Amid BoE Caution and Rising Inflation

The British pound (GBP) has fallen below its 200-day moving average as the Bank of England's Monetary Policy Committee voted to keep interest rates at 3.75%, but three members pushed for a rate hike to 4%.

UK inflation rose to 3.1% in August, a five-month high, and the BoE expects it to rise further over coming quarters, with its short-term forecast above 4% in early 2027.

The market still prices in a 74% chance of a rate hike at the next BoE meeting on November 5, but traders are advised to position for further downside in GBP/USD as the pair remains capped under its 200-day moving average.