GBP/USD Holds Firm Near 1.3600 as BoE Hike Expectations Shift

The British Pound has been trading around 1.3600 in Asian hours after two consecutive daily declines, showing a modestly firmer tone.

Money markets have shifted their expectations for the next Bank of England rate hike from late 2026 to early 2027, with just 24 basis points of tightening priced by December and 36 basis points by February 2027.

Despite firmer UK inflation at 2.9% in July and a projected increase toward year-end, markets see a high likelihood that the BoE rate stays at 3.75% through the end of the year.