GBP/USD slides to 1.2650 as traders brace for BoE policy decision

GBP/USD declined 0.4% to 1.2650 ahead of Thursday's crucial Bank of England monetary policy meeting, with markets pricing in a 65% probability of a 25 basis point rate hike. Sterling weakness reflects growing concerns about the UK's economic outlook, as recent GDP data showed quarterly growth of just 0.1%, below the 0.3% forecast. Inflation remains stubbornly high at 7.8%, forcing the BoE to balance growth concerns against price stability mandates. Technical analysis reveals GBP/USD testing support at the 50-day moving average (1.2645), with a break below potentially accelerating losses toward 1.2600. Resistance sits at 1.2700, which has capped rallies for the past week. Market positioning suggests cautious sentiment, with traders reducing long sterling positions ahead of the BoE announcement, anticipating potential dovish surprises despite inflation pressures.