BOE's Bailey tells Reeves - hands off banking system

[Redator]

The British pound is showing limited movement on Tuesday. In the North American session, GBP/USD is trading at 1.3500, up 0.09% on the day. A day earlier, the pound jumped 0.60% and hit a high of 1.3510, its highest level since July 11.

Bailey warns government not to ease financial rules

Bank of England Governor Bailey testified before the Treasury Committee today and warned the UK government not to tamper with the structure of the banking system. Bailey defended the "ring-fencing regime" which separates retail and investment operations. Bailey said the current system reduces risk and protects consumers, businesses and households in the event of bank failures.

Bailey was responding to comments from Finance Minister Reeves, who said last week that regulators needed to be more "growth friendly" and resist "excessive caution" in order to boost investment and innovation. Reeves complained that excessive regulation was a "boot on the neck of businesses".

Bailey fired back in his testimony, telling lawmakers that, "there isn't a trade off between financial stability and growth" and pledged that the BoE would ensure that the financial system would remain resilient.

Fed eyes rate cut in September

The Federal Reserve is expected to continue its wait-and-see approach and maintain the benchmark rate at its July 30 meeting, despite increasing pressure from President Trump on the Fed to lower rates. The money markets have priced in a hold at 97%, according to CME's Fedwatch. Things get interesting in September, with a 58% chance of a rate cut.

The Fed is expected to lower rates at least once before the end of the year, but the rate path will depend to a great extent on inflation and whether tariffs are replaced by trade agreements.

GBP/USD Technical

• GBP/USD has pushed above resistance of 1.3496. Above, there is resistance at 1.3510
• 1.3485 and 1.3471 are the next support levels

GBPUSD 1-Day Technical, July 22, 2025

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