The Bank of England is widely expected to raise Bank Rate from 3.75% to 4% on 5 November. For anyone trading or converting pounds and dollars, that makes GBP/USD one of the more closely watched pairs of the autumn. Here is why a rise is expected, why it may not lift sterling as much as people assume, and how to work out what a move in the pair costs you in pounds.
Why a rise is expected
UK inflation rose to 3.5% in September from 3.1% in August, according to the Office for National Statistics, above the 3.4% economists had forecast. Motor fuel prices were up almost 30% on the year, and the wider measures also edged higher: core inflation reached 2.8% and services inflation 3.7%.
The Bank’s Monetary Policy Committee held Bank Rate at 3.75% in September, but three of its nine members already voted for an increase. Its minutes also warned that the risk of second-round effects from higher energy prices had grown. After the latest inflation figures, money markets moved to price a quarter-point rise on 5 November as close to certain.
Why a rise may not lift the pound much
When a move is already priced in, the decision itself tends to matter less than the detail around it. For sterling, three things stand out:
- The vote split. A large majority for a rise reads differently from a narrow one with several members preferring to wait.
- The guidance. Signals about whether further increases could follow in February will shape expectations more than the 5 November move.
- The other side of the pair. The US Federal Reserve announces its own decision on 28 October, the same day as the UK Budget. If the Fed sounds firmer than the Bank of England, the gap between the two central banks can work against the pound even after a UK rise.
GBP/USD has reflected this tug of war. It fell from 1.3676 in late August to a low of 1.3137 on 14 October, then recovered to around 1.34, where it has struggled to hold. Prices at that level are a snapshot, and they will have moved by the time you read this.
What a pip is worth on GBP/USD
For GBP/USD, a pip is a move of 0.0001. On a standard lot of 100,000 units, one pip is worth $10. Because the pair is quoted in dollars, a UK-based trader needs to convert that into pounds, and the answer changes with the exchange rate. At 1.3400, $10 is about £7.46 per pip on a standard lot, roughly 75p on a 0.1 lot and 7p on a 0.01 lot.
A calculator makes this quicker, especially for a quick check before a data release. CompareForexUK has a free GBP/USD pip value in pounds tool that converts the figure using current reference rates, so you do not have to do the sum by hand.
Sizing a position around event risk
Central bank decisions can widen spreads and move prices fast, and a stop-loss order is not guaranteed to fill at the level you set. That makes position size the one variable you control. Reducing size ahead of a release, or waiting until after it, are both common ways to limit event risk. A simple worked example:
Divide £50 by 40 pips to get £1.25 per pip. Divide that by £7.46 and the position is roughly 0.167 lots, which you would round down to 0.16 lots. The risk on that trade is then about £47.76, inside the £50 limit. A trader using a 0.5 lot size instead would be risking around £150 on the same stop, three times the intended amount.
Dates to note
- 28 October: US Federal Reserve decision and the UK Budget
- 5 November: Bank of England decision, with the vote split published alongside
Trading leveraged products such as CFDs and spread bets carries a high risk of losing money rapidly. This article is for information only and is not investment advice.
Sources: Office for National Statistics (CPI, September 2026); Bank of England Monetary Policy Summary, September 2026; Reuters/LSEG market reporting; PoundSterlingLive GBP/USD history.