GBP/USD climbed more than one big-figure to 1.2888 on Friday, recovering from a fall to its weekly low of 1.2767 in Asia as U.S. interest rates resumed their descent and traders prepared for a BoE meeting next week expected to yield a 25bp hike and potentially a sterling-positive outlook of more to come.

Sterling's recent decline from its July 13 high at 1.3144 had followed reduced BoE rate expectations as investors scaled back bets on a 50bp hike on Aug.
3 -- and tightening into 2024 -- after below-forecast UK inflation reported on July 19 unravel hawkish views.

The pound had also suffered from somewhat cautious guidance offered by the Fed and ECB on the risk that the BoE to follow suit next week.

But UK inflation, which remains further out of bounds than the euro zone or U.S., provides a solid fundamental underpinning for GBP.

Markets IRPR still expect the BoE to continue hiking rates and to hold them higher than the Fed and ECB into the medium term, which should keep GBP/USD relatively well bid, and temper knee-jerk moves lower as global inflation metrics move lower.

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