GBP/USD Rockets After Bank of England’s Unanimous 9-0 Pivot Signals Higher-for-Longer Rates

The GBP/USD surged nearly 3% on Thursday after the Bank of England delivered an unexpected unanimous 9-0 policy shift. The pair jumped from about 1.2350 to break above 1.2700 within hours of the 12:00 GMT announcement. Key details: the Monetary Policy Committee held rates at 5.25%, but removed “further tightening” language and stressed rates must stay restrictive “for an extended period.” Services inflation stayed sticky at 6.1%, while the Bank balanced this against signs of weakening domestic demand and a softer labor market, plus global growth headwinds. Market expectations had priced in roughly a 40% chance of a rate cut, and traders expected some dovish dissent. Instead, the vote was fully hawkish, triggering rapid repricing in sterling. Trading volumes reportedly rose to around 300% of the 30-day average, and sterling options implied volatility hit an eight-month high. Immediate ripple effects: UK gilt yields jumped (2-year up 15 bps to 4.35%). GBP/USD momentum was accelerated by stop-loss triggers above 1.2500 and 1.2600, plus technical breaks of the 200-day moving average and the 61.8% Fibonacci level—fuelled by short-covering as speculative shorts reached their highest since Sept 2023. Analysts revised forecasts: Goldman lifted its 3-month GBP/USD target to 1.2800, while JP Morgan pushed the first expected BoE cut timing from May to August. For GBP/USD traders, the core focus is whether upcoming UK inflation and wage data confirm the “higher-for-longer” stance and whether the BoE’s vote pattern stays tight at future meetings.