GBP/USD hits fresh six-month low below 1.2250 on BoE’s surprise hold

• GBP/USD extends sell-off to hit a fresh six-month low, nearing the 1.2200 mark.
• Bank of England surprises by holding interest rate at 5.25% in the September meeting.
• Focus shifts to the US economic data for further trading impetus on GBP/USD.

GBP/USD sees a fresh bout of selling pressure, hitting the lowest level since March this year, as the Pound Sterling feels the heat of the dovish Bank of England (BoE) interest rate decision.

Following the September meeting, the BoE decided to keep the benchmark interest rate steady at 5.25%, as against market expectations of a 25 basis points (bps) hike to 5.50%. However, industry experts and analysts had begun pricing chances of a status quo after the unexpected fall in the UK inflation data for August.

The Office for National Statistics (ONS) said on Wednesday that the UK annual Consumer Price Index (CPI) edged 6.7% higher in August, cooling off from a 6.8% rise in July. The market consensus was for a 7.1% increase. 

The Services CPI rose 6.8% YoY vs. July’s 7.4% surge. The ONS said, “the largest downward contributions to CPI rates came from food and accommodation services.”

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