GBPUSD GBP/USDOANDA:GBPUSDShavyfxhubGBPUSD 1.32700 DEMANDFLOOR LOOKING FOR LONG POSITION GBPUSD CURRENT CLOSE OF PRICE ON FRIDAY @ 1.33885 The current Bank of England (BoE) Base Rate is 3.75% (effective December 18, 2025, after 25 bps cut from 4.00%; unchanged through Jan 11, 2026). inflation (3.2% CPI, above 2% target). Next meeting: Feb 5, 2026. the BOE rate Influences UK mortgages The Bank of England (BoE) base rate directly influences UK mortgages and GDP through monetary policy transmission. Impact on Mortgages Tracker/Variable Rates: Directly tied to base rate (currently 3.75%). December 2025's 25 bps cut lowered tracker payments immediately; Nationwide SMR fell from 6.74% to 6.49%, BMR from 6% to 5.75%. Fixed Rates: Indirectly affected via swap rates/market pricing. Lower base rate = cheaper funding = sub-4% 5-year fixes expected by mid-2026 (from 3.55% today). Remortgaging: ~1.5M households face SVRs (Standard Variable Rate ) Impact on GDP Stimulus Channel: Lower rates → cheaper borrowing → higher consumer spending (70% GDP) and business investment → 0.2-0.5% GDP boost per 1% cut. Housing Multiplier: Cheaper mortgages → property transactions up 10-15% → construction/spending ripple. Currency Effect: Weaker GBP boosts exports but raises import inflation (3.2% CPI). Current Cycle: 6 cuts since Aug 2024 added ~1% to 2025 GDP growth; further easing to 3.5% projected supports flatlining economy. Net Effect: Rate cuts (3.75% → 3.5% expected) provide mortgage relief (~£2B annual household savings) while cautiously supporting GDP without reigniting inflation. GB10Y@4.377% HEAD OF THE BOE Andrew Bailey is the current Governor of the Bank of England, serving since March 16, 2020. His term runs through March 2028. Major Economic Releases Jan 15: November 2025 GDP (expect continued contraction) Jan 21: December 2025 CPI Inflation (forecast ~2.1-2.3%) Jan 14: ICAEW Business Confidence Q4 2025 Feb 18: January 2026 CPI Inflation Trading Focus Feb 5 MPC is highest impact—markets price ~40% chance of 25bps cut to 3.5%. Watch CPI trajectory vs 2% target and Bailey's forward guidance. BOE Monetary Policy Report Monetary Policy Summary MPC Official Bank Rate Votes Official Bank Rate FEDERAL RESERVE HEAD @: Jerome Powell is the head and Chair since Feb 2018 Federal Funds Rate: 3.5%-3.75% target range (effective post-Dec 2025 cuts; steady through Jan). PCE@2.5% WHAT IS PCE??? PCE (Personal Consumption Expenditures) is the Federal Reserve's preferred inflation measure, tracking changes in prices of goods and services bought by U.S. consumers Key Points: Core PCE excludes volatile food/energy prices (Fed's 2% target gauge) Monthly Release: BEA publishes last Friday (~8:30 AM ET); Dec 2025 data due Jan 31, 2026 Current Level: ~2.6% YoY headline, 2.7% core (Dec estimate) Trading Impact: Hot PCE (>3%) pressures Fed rate cut expectations → USD strength, gold/silver pressure. Cool PCE (