GBP/USD Volatility: BoE Rate Decision Sparks Brief Pound Surge

The British Pound Sterling saw gains against the US Dollar on Thursday after the Bank of England maintained its interest rate at 3.75% in a 6-3 vote, despite expectations of a larger increase.

However, these gains were short-lived as the US Dollar received support from a hawkish pause by the Federal Reserve and an internal FOMC policy split, causing the GBP/USD pair to depreciate to around 1.3450 during Asian hours on Friday.

The dissenting bloc within the Bank of England grew by one from June, with members arguing that the longer energy prices remain volatile and above pre-conflict levels, the greater the risk of second-round effects in wage and price setting.