On Thursday, the GBP/USD pair entered a bearish consolidation phase below the round 1.3400 level. Investors are cautious and refrain from opening new positions ahead of the Bank of England's rate decision.

The BoE is expected to leave rates unchanged at the September meeting. Attention should therefore focus on subsequent signals about the policy path, given higher energy prices driven by the prolonged Middle East conflict. Markets currently price in roughly an 80% chance of a November rate hike — the first of four expected increases over the coming year. But the BoE's forecasts and commentary can materially affect sterling and give GBP/USD a directional impulse.

Some suggest the BoE will keep the current rate but signal a risk of a November hike.

MUFG/BTMU analysts believe the BoE will deliver a decision they describe as "sufficiently hawkish" while maintaining the status quo: the bank will likely use the statement to "hint at the probability of a November rise if energy prices stay elevated." The vote is expected to finish around 6–3, though MUFG/BTMU note a tighter 5–4 split could surprise, especially since Deputy Governor Clare Lombardelli may side with the dissenters.

Overall, MUFG/BTMU expect most MPC members to still favor a "wait-and-see" approach despite the possibility of further tightening this year.

Against the backdrop of central-bank events, the US dollar is consolidating near late-July highs, providing some floor for the pair and preventing a deeper drop. Nonetheless, the Federal Reserve's hawkish tone combined with Middle East risk supports the dollar as a safe-haven and limits any substantial GBP/USD recovery attempts.

On Wednesday, the Fed delivered the expected 25-bp hike and confirmed another hike is likely soon.

Tensions between the US and Iran remain in focus, underscoring geopolitical risks that continue to support the dollar as a safe asset. The path of least resistance for GBP/USD remains downward, and rally attempts are likely to meet selling.

Technically, recent breaks below the key 200- and 100-day SMAs confirm the downside bias and counsel caution for aggressive buyers.

In the short term, the pair remains bearish, trading below the 200-day SMA at 1.3455. Spot quotes have also slipped back below the 100-day SMA, limiting upside potential. Nearest support is the September low, with a further support level at 1.3340. Oscillators are negative, confirming bears' advantage and that the path of least resistance is down.