Sterling Soars Amid BoE Comments and Solid GDP Data

Sterling reached a four-month high after the Bank of England's comments and stronger-than-expected GDP data reduced expectations for an August rate cut. The pound rose 0.25% to $1.2881, its highest since March. Policymakers’ stance and the latest GDP figures have led traders to reconsider the likelihood of imminent rate cuts.

Sterling hit a four-month high on Thursday after comments from Bank of England policymakers and better-than-forecast GDP data influenced traders' bets on an August rate cut in Britain. The pound advanced 0.25% to $1.2881, marking its strongest level since early March.

BoE chief economist Huw Pill mentioned that price pressures remained persistent, and May's economic output increased by 0.4%, surpassing expectations, boosting the pound, according to Lee Hardman, senior FX analyst at MUFG.

Pill's remarks suggested he is not ready to change his vote on a rate cut at the upcoming August MPC meeting. This has caused futures markets to show a roughly 45% chance of a rate cut on August 1, down from a higher likelihood before the comments.