• The Pound Sterling surges to near 1.3250 against the US Dollar following the Fed’s large rate cut and expectations of further policy easing. 
• Investors focus on the BoE policy meeting, with markets expecting the UK central bank to leave interest rates unchanged at 5%.
• UK’s stubborn services inflation in August strengthened the case for the BoE keeping interest rates steady.

The Pound Sterling (GBP) recovers intraday losses in the aftermath of the Federal Reserve’s (Fed) policy announcement, rising above 1.3200 against the US Dollar (USD) in Thursday’s London session. The valuation of the British currency is expected to remain volatile ahead of the Bank of England (BoE) policy meeting at 11:00 GMT. 

The BoE is expected to leave interest rates unchanged at 5% after opting for a cut in August as central bank officials remain concerned about inflation’s sustainable return to the bank’s target of 2%. Out of the nine Monetary Policy Committee (MPC) members, BoE external member Swati Dhingra and Deputy Governor Dave Ramsden are expected to vote for cutting interest rates for the second consecutive time. The rest of the MPC will likely support keeping rates at their current levels.