GBP/USD rises to 1.3175 on hawkish BoE rate expectations

Sterling strengthened 0.4% (52 pips) against the dollar to reach 1.3175, driven by growing expectations that the Bank of England will maintain its hawkish stance amid persistent UK inflation concerns. Market pricing now reflects only a 30% probability of a rate cut at the September meeting, down from 45% last week, following comments from BoE officials emphasizing the need for sustained evidence of disinflation. UK services inflation remains elevated at 5.2%, well above the BoE's comfort zone, supporting the pound's resilience. The Dollar Index retreated 0.2% to 101.78, providing additional support for cable's advance. Technical analysis reveals GBP/USD has broken above the key 1.3150 resistance, with next targets at 1.3200 and 1.3225. Support has formed at 1.3130, coinciding with the 20-day moving average. Traders are positioning for continued sterling strength unless upcoming UK economic data significantly disappoints expectations.