Recent Federal Reserve rate hikes to the 3.75-4.00% target range, reinforced by September minutes signaling another increase by year-end, have widened the policy gap versus the Bank of England’s 3.75% Bank Rate, bolstering USD strength and pressuring GBP/USD near 1.32-1.33 levels. Traders price an 80-85% chance of a BoE November 5 hike that could narrow the differential, while the UK’s October 28 Autumn Budget and upcoming inflation prints including September PCE and UK CPI will shape rate expectations. Elevated UK gilt yields above 5% and fiscal concerns add downside risks for sterling, though any pause in Fed tightening could support a rebound toward recent 1.36 highs amid broader risk sentiment.