US core PCE price index rose 0.1% MoM in June, the smallest increase since March 2025.

BERENBERG analyst Andrew Wishart says Europe's Q2 activity showed resilience despite the energy shock, reducing the likelihood that policymakers must pursue preventive rate hikes to avert a wage-price spiral that would threaten jobs. He warns the Bank of England could still deliver a 25bp hike if energy prices rise further, but the lack of a rebound in labour demand means disinflation is likely to persist. Wishart expects the Bank of England to begin cutting in December, projecting the policy rate to fall from 3.75% to 3.0% by mid-2027.

Following the Bank of England rate decision, GBP/USD ticked up about 13 pips in intraday trade to 1.3394.