The GBP/JPY currency pair hovered above a 1-month low of 212.59 on Thursday ahead of the outcome of the Bank of England’s policy meeting.
The BoE is expected to leave its benchmark interest rate intact at 3.75% at its June 18th meeting.
Policy makers have taken a cautious stance on whether higher energy prices linked to the Iran conflict could lead to longer-lasting inflation pressures.
UK inflation has remained above the BoE’s 2% target for most of the past five years, with the central bank previously warning inflation could surge above 3.5% later in 2026.
Figures from the UK Office for National Statistics showed that headline CPI had risen 2.8% year-on-year in May, matching April’s pace. Core CPI edged up to 2.6% year-on-year from 2.5% in the prior month. These latest readings may give the BoE more room to maintain steady interest rates.
Meanwhile, the Bank of Japan raised its short-term interest rate by 25 basis points to 1.0% from 0.75% this week. The adjustment took the benchmark rate to its highest point since 1995. The rate decision was made by a 7-1 vote.
According to the Monetary Policy Statement, BoJ board members intend to continue raising the policy rate in line with changes in economic activity, inflation dynamics, and financial conditions.
The GBP/JPY currency pair was last down 0.24% on the day to trade at 212.90.
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