Before next Thursday's decision, Governor Andrew Bailey distanced Britain from US consumer price pressures, pointing to "strong evidence" that UK inflation is easing. Widely, economists are expected to keep the Bank of England's interest rates at their highest level in 16 years at 5.25%. Investors will be watching closely for clues as to whether policymakers see June or August as an opportunity to start cutting borrowing costs.

Overall, stronger-than-expected inflation data on both sides of the Atlantic has led traders to postpone their bets on a Bank of England rate cut until September, with only one fully priced move this year. However, a cautious shift in tone from Bailey and Deputy Governor Dave Ramsden in April has prompted some economists to believe that the timing of Bank of England cuts could be closer to the European Central Bank. This is widely expected to move in June - than the US Federal Reserve, whose chairman Jerome Powell has avoided providing a timetable for US easing.

Meanwhile, Bailey expects UK inflation to fall closer to his 2% target in the upcoming April data, although some on the nine-member Monetary Policy Committee remain concerned about core price pressures. On Friday, The BOE's decision will be followed by GDP data that is expected to show the UK economy emerged from a shallow recession in the first quarter. Moreover, Economists expect the figures to show output growth of 0.4% after two consecutive quarterly declines last year.

On the other hand, the US economic data calendar is light... as the University of Michigan will release on Friday its preliminary survey of US consumer confidence for the month of May. Confidence is expected to change slightly as Americans take stock of rising prices, rising interest rates and a moderate labor market. The day before, the government will release weekly US unemployment claims numbers. Claims for unemployment benefits remain near historically low levels.

Technical forecasts for the GBP/USD pair today:

According to the performance on the daily chart, the price of the GBP/USD pair is still in the early stages of breaking the overall downward trend and will not succeed in doing so without the bulls moving towards the resistance levels at 1.2775 and 1.2900, respectively. Currently, a return to stability below the support level of 1.2500 may encourage bears to control their direction for a period. Technically, we expect the GBP/USD pair to move in narrow ranges until a reaction to the Bank of England's announcement next Thursday. Additionally, the currency pair will be influenced by the extent of investors' risk appetite as well as the performance of global financial markets.

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