GBP/USD Advances as BoE Signals Stability While Markets Await Key US Inflation Data

By Usman Ahmed September 8, 2026, 10:58 am • Posted in Forex

The Pound Sterling (GBP) edged higher on Tuesday, gaining more than 0.08% as investors assessed comments from Bank of England (BoE) policymakers before the UK Treasury Select Committee. Meanwhile, a relatively quiet US economic calendar kept the US Dollar under pressure. GBP/USD climbed to around 1.3548 after recovering from an intraday low of 1.3521.

BoE Governor Andrew Bailey said the UK economy is not close to entering a recession, describing recent economic data as broadly solid. However, he acknowledged that the labor market is weakening as the pace of hiring declines.

Other policymakers delivered mixed but relatively cautious messages. Alan Taylor argued that maintaining interest rates at a moderately restrictive level offers protection against inflation risks. David Ramsden said domestic inflation pressures remain relatively contained, while Megan Greene highlighted concerns that persistently elevated Oil prices could generate second-round inflation effects.

The comments underline the division within the BoE’s Monetary Policy Committee (MPC). Nevertheless, markets see little chance of a rate hike at the September 17 meeting, with money markets currently pricing an approximately 86% probability that the Bank Rate will remain unchanged. The previous meeting ended with a 6-3 vote, and investors expect a similar split next week, shortly after the Federal Reserve announces its own policy decision.

On the data front, UK retail sales growth slowed to a four-month low in August, according to figures from the British Retail Consortium, limiting the Pound’s upside.

Geopolitical developments also remain important. Rising tensions in the Middle East have pushed energy prices higher following attacks on Saudi Arabian energy infrastructure by the Houthis.

In the US, the New York Federal Reserve’s Consumer Survey showed households becoming slightly more optimistic about inflation, although expectations for future gasoline prices increased. The report had limited market impact as traders remain focused on upcoming US producer and consumer inflation data.