With the Pound near 1.34, how will a divided BoE vote on 5 November?

A second consecutive advance takes GBP/USD back to just below 1.3400.
Sterling outperforms the Euro as the Dollar retreats following the ECB decision.
Following a 6-3 vote to keep rates unchanged, the BoE's next decision is due on Thursday, 5 November.

GBP/USD is outperforming EUR/USD, with Sterling avoiding the fresh low that the Euro reached after the European Central Bank (ECB) left rates unchanged. Having touched its session low just below 1.3300 before the ECB announcement, GBP/USD has advanced since ECB President Lagarde's press conference got under way. The pair now trades close to its session high, just below 1.3400.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

With the UK's Bank Rate unchanged at 3.75% since December 2025, three of the Bank of England's (BoE) nine policymakers backed an increase in September. By contrast, the Fed, the ECB and the Bank of Japan have each increased rates in 2026. At the lower end of the Fed's 3.75%-4.00% range, the Bank Rate leaves GBP/USD with an interest rate differential of no more than a quarter-point.

GBP/USD showed little response to a Citi and YouGov survey in which Britons' inflation expectations for the year ahead eased to 4.2% in October from 4.5%. Longer-term expectations declined to 4.0%, matching the Bank Rate that would result from a quarter-point increase on 5 November.

What is next on the calendar?

At 12:00 GMT on 5 November, the BoE will release its rate decision alongside the quarterly Monetary Policy Report, followed by remarks from BoE Governor Bailey at 12:30 GMT. A further two votes in favour of an increase would secure a majority, changing the UK component of GBP/USD's interest rate differential for the first time since December 2025.

On the US side, Friday's Chicago Purchasing Managers Index (PMI), due at 13:45 GMT, is forecast to ease to 56.1 from 58.8. The September job openings release follows on 3 November at 15:00 GMT, with the previous reading at 7.079 million. Both releases feed into the US component of the rate differential.

What do the charts indicate?

Back above its 50-day Exponential Moving Average (EMA), which sits just over 1.3350, GBP/USD remains below the 200-day average. Over two days, the rebound has retraced roughly three-quarters of the decline from the 22 October high. Measured against the fall from the August peak to the 14 October low, the pair has regained slightly less than half of that loss.

Daily chart for GBP/USD

Pound Sterling: Frequently Asked Questions

What defines the Pound Sterling?

As the United Kingdom's official currency, the Pound Sterling (GBP) is also the world's oldest, dating back to 886 AD. Data for 2022 places it fourth among the world's most traded foreign exchange (FX) currencies, with a 12% share of all transactions and average daily turnover of $630 billion. Among its main trading pairs, GBP/USD, known as ‘Cable’, represents 11% of FX transactions. GBP/JPY, referred to by traders as the ‘Dragon’, accounts for 3%, while EUR/GBP represents 2%. Issuance of the Pound Sterling is handled by the Bank of England (BoE).

How do Bank of England decisions affect Sterling?

Monetary policy set by the Bank of England is the most influential driver of the Pound Sterling's value. In making policy decisions, the BoE assesses whether it has met its principal objective of “price stability” – inflation holding steadily at around 2%. Adjusting interest rates is its main means of achieving that objective. To curb excessively high inflation, the BoE seeks to raise interest rates, increasing borrowing costs for households and businesses. GBP generally benefits because higher rates make the UK a more appealing destination for international investors' funds. Inflation that falls too low signals a slowdown in economic growth. Under those circumstances, the BoE will consider cutting rates to reduce the cost of credit, encouraging businesses to borrow more for investment in projects that support growth.

Why do economic releases matter for the Pound?

By revealing the economy's condition, economic releases can affect the Pound Sterling's value. GDP, Manufacturing and Services PMIs, and employment figures are among the indicators that can steer GBP. Sterling benefits from a robust economy, which draws greater foreign investment and may prompt the BoE to raise interest rates, directly strengthening GBP. Conversely, disappointing economic data is likely to weigh on the Pound Sterling.

Why does the Trade Balance affect Sterling?

The Trade Balance is another important release for the Pound Sterling. Over a specified period, it compares a country's export earnings with its expenditure on imports. Strong overseas demand for a country's exports creates additional demand for its currency as foreign buyers purchase those goods. A positive net Trade Balance therefore supports the currency, whereas a negative balance has the opposite effect.