US jobs and Fed hawks overshadow BoE hike, leaving British Pound subdued

• 4%: BoE lifts rates following an 8-1 split vote.
• 4.4% UK inflation forecast points to risks of additional tightening.
• 189K: US jobless claims decline as Fed officials back gradual rate increases.

GBP/USD is virtually flat at 1.3467. Sterling has given back its earlier gains against the US Dollar despite the Bank of England (BoE) lifting rates to 4% and narrowing the gap with the Fed. Robust US figures and hawkish remarks from Fed officials have put pressure on the UK currency.

1.3467: GBP/USD loses gains as US data and hawkish Fed comments counter BoE tightening

An 8-to-1 vote saw the BoE lift the Bank Rate, while Catherine Mann backed a 50-basis-point increase. The central bank also revised its Q1 2027 inflation projection to 4.4%, from 3.2% in July, pointing to more rate increases ahead. Even so, it finds little evidence that higher energy prices are generating second-round effects.

A further rate rise “may be warranted,” BoE Governor Bailey told the press conference. Progress in the Iran conflict could ease inflationary pressures, he added. Rather than endorsing the view that only two increases are required, he said the number would depend on the risks.

Further rate increases are envisaged by Monetary Policy Committee members Pill, Lombardelli and Greene, as well as Mann, whose stance is already clear.

Initial Jobless Claims dropped to 189K from 195K in the week ending 31 October, undershooting the 196K forecast and underscoring US labour market resilience. Challenger, Grey and Christmas reported that October Challenger Job Cuts edged up to 43.994K from 43.281K, an increase of just 2% from September. Although layoffs rose, employers last month announced plans to recruit 444.692K workers, 57% more than a year earlier.

Comments from Fed officials also drew attention. With more work still required of the Fed, Cleveland Fed President Beth Hammack advocated gradual rate increases. Richmond Fed President Thomas Barkin likewise favoured a gradual approach, warning that “broad-based” inflation is still too high.

Expectations of additional BoE rate increases have left GBP/USD subdued against this backdrop. Strong employment figures and hawkish Fed messaging are limiting its upside, while investors weigh the Democratic sweep in the US midterm elections.

With no UK releases scheduled ahead, attention turns to US Nonfarm Payrolls.

1.3476: GBP/USD Price Forecast and Technical Outlook

At 1.3476 on the daily chart, GBP/USD retains a positive near-term bias. Spot remains above both the latest simple moving average cluster around 1.3366 and rising trend-line support near 1.3360, drawn from the 1.3140 base. This points to underlying buying interest on dips. Momentum supports that view: the 14-period Relative Strength Index is near 64, reflecting firm buying pressure that is not yet extreme. Meanwhile, the FXS Fed Sentiment Index is settling near 144, suggesting broader USD-related headwinds remain contained for now.

The first upside hurdle lies around 1.3508, where the latest reaction high meets the descending resistance trend line. A stronger barrier follows near 1.3544 at the next downward-sloping resistance line. Above that, the rising-trend reference at 1.3606, traced from the 1.3159 support sequence, adds to the overhead supply zone. Immediate downside support sits in the 1.3366–1.3360 cluster, where moving-average support converges with the lower rising trend line. A break below this area would undermine the bullish bias and open the way for a deeper correction towards earlier swing levels on the daily chart.

(The technical analysis of this story was written with the help of an AI tool. Know more.)