The GBP/USD pair is facing losses after comments from the Bank of England.
The British pound has been on a decline against the US dollar for the past three sessions. The current exchange rate for GBP/USD is at 1.2286.
The pound's decline gained momentum after the Bank of England's chief economist, Huw Pill, hinted at a potential interest rate cut by mid-2024. This statement was seen as a shift in the central bank's stance on monetary policy.
Previously, BoE Governor Andrew Bailey had stated that it was premature to discuss lowering interest rates. However, he believes that inflation could reach the target level of 2% by the end of 2025.
Market expectations regarding interest rates may change in light of this new information. Currently, investors are predicting a 25 basis point decrease in the lending rate next August. This potential delay in an interest rate cut has further weakened the already fragile pound.