GBP/USD trades near 1.32-1.34 amid widening Fed-BoE policy divergence and Middle East-driven energy price spikes that bolster safe-haven USD demand while lifting UK inflation risks. The Federal Reserve’s September hike to the 3.75-4.00% range, with minutes signaling further tightening likely before year-end, contrasts with the Bank of England’s 6-3 hold at 3.75% despite three members favoring a November increase and forecasts of CPI exceeding 4% in early 2027. UK gilt yields near multi-year highs reflect fiscal pressures ahead of the October 28 budget, while softer U.S. labor data and upcoming CPI releases could shift rate expectations. Traders monitor these data points and geopolitical developments for near-term moves in the pair.