GBP/USD in the spotlight later today as BOE policy decision looms

The Pound and the GBP/USD could be in the spotlight later this morning as the Bank of England policy decision awaits, at 11am GMT. The markets do not expect any change in the current UK base rate of 5.25%. That is pretty much the overwhelming consensus, but as noted here yesterday, such an outcome is not entirely a given. The latest UK headline CPI print yesterday saw the annualised level of US consumer prices fall back to exactly the BOE target of 2%. Now, more usually that might be enough to deliver a lowering in the base rate. However, on this occasion just 2 weeks out from the general election, such a move might be construed as politically motivated and the higher than forecast services inflation seen yesterday is also a reason for the BOE not to move today. Nonetheless, the GBP/USD is a little lower this morning, which might seem slightly at odds with the BOE remaining on hold. It is fair to say; that is due to the higher dollar this morning and nothing about the potential for the BOE to cut later on. The GBP/USD reached 1.2740 yesterday and posted a synthetic US close at 1.2720. It is currently trading at 1.2710