The Pound Sterling (GBP) saw modest selling pressure on Tuesday during the European session as traders increasingly favored the view that the Bank of England (BoE) will cut interest rates at its May policy meeting. This pullback in the British Pound comes as inflation expectations in the United Kingdom ease and global trade uncertainty adds further weight to dovish central bank outlooks.
Traders are shifting towards BoE dovish policy bets, citing disinflationary trends expected from the global fallout of U.S. tariff policies under President Trump. The UK central bank is anticipated to ease rates to support weakening domestic demand and labor markets.
BoE Greene Flags Disinflation Risks from Trump Tariffs
BoE policymaker Megan Greene echoed concerns over the global effects of rising trade protectionism. Speaking at the Atlantic Council, Greene warned that Trump’s aggressive tariff policy could be “net disinflationary” for the UK economy, as global producers—especially from China—seek to offload goods in alternative markets at lower prices.
Greene also emphasised structural issues such as “weak productivity” and increasing risks in the labor market, especially from higher employer contributions to social security schemes. This exposes the BoE to further pressure in maintaining a supportive monetary policy, increasing the likelihood of a BoE interest rate cut in May.
Technical Analysis: GBP/USD Remains Bullish Above 1.3400
Technically, the Pound Sterling remains in positive territory above the significant support level of 1.3400. The GBP/USD has remained above all major Exponential Moving Averages (EMAs) with positive momentum in the outlook.
Furthermore, the 14-day Relative Strength Index (RSI) has bounced after testing the 60.00 level, indicating possible bullish strength. Potential resistance to the upside continues to be at the psychological level of 1.3600, with support levels potentially being the April 3 high mark near 1.3200.
Conclusion
Current outlook for the British Pound for April 2025 is again influenced by expectations regarding a BoE interest rate cut as inflation eases and global trade concerns are raised through Trump’s tariffs. Although GBP/USD has backed off slightly, unless there are breaks below some key support levels, the overall uptrend remains intact. For now the Pound Sterling is trading cautiously, caught between a shift in domestic monetary policy and uncertainty on the global stage.
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