The GBP/USD currency pair settled above recent low of 1.3382, its weakest level since May 21st, in the wake of the Federal Reserve’s and the Bank of England’s policy decisions.

The Fed kept its federal funds rate target range without change at 4.25%-4.50% at its June meeting, in line with market consensus.

Fed policy makers have taken a cautious stance to fully evaluate the economic impact of the Trump administration’s policies concerning tariffs, immigration and taxation.

The central bank highlighted that uncertainty over the economic outlook had diminished, but was still elevated.

The Federal Reserve still projects two interest rate cuts this year, despite slowing growth and persistent inflation pressures.

The US central bank revised down its 2025 GDP growth forecast to 1.4% from 1.7% in the March projection. And, the 2026 forecast was revised down to 1.6% from 1.8% previously.

Additionally, annual core PCE inflation forecasts were revised up, as follows:

– for 2025 – to 3.0% from 2.7%;
– for 2026 – to 2.4% from 2.2%;
– for 2027 – to 2.1% from 2.0%.

In the meantime, the Bank of England left its benchmark interest rate without change at 4.25% at its June meeting, as it cited a challenging backdrop of heightened global uncertainty and persistent inflationary pressures.

Three MPC members voted in favor of a 25 bps rate cut to 4%.

The BoE said that consumer inflation was likely to remain broadly at current levels for the rest of 2025 before easing toward the target in 2026.

Still, the BoE warned of “two-sided risks to inflation,” expressing concern over rising energy prices amid escalating Middle East tensions and potential trade disruptions from US tariffs.

The GBP/USD currency pair settled 0.13% lower at 1.3448 on Friday.

The major Forex pair lost 0.82% for the week.