Ahead of Thursday’s key event, Bank of England (BOE) monetary policy meeting, Reuters came out with the analysis by saying, “The Bank of England will say on Thursday whether it is worried about a recent jump in inflation, which broke above the central bank's 2% target and looks set to climb higher as Britain reawakens its economy from its coronavirus slumber.”

“But last week, the U.S. Federal Reserve began to move towards reducing its pandemic stimulus by signaling its first rate hike in 2023, a year earlier than previous projections, putting the focus on what other central banks might now do,” added Reuters.

The analytical piece also quotes Hugh Gimber, global market strategist at J.P. Morgan Asset Management, as saying, “Last week the Fed took its first step in guiding investors towards less easy policy ahead. The Bank of England may not be far behind.”

Comments from Evercore, a consulting firm, go a step ahead while favoring the rate hike concerns by May 2022 “if the furlough phase-out goes better”.

Against this backdrop, GBP/USD stays sidelined around 1.3965 by the press time of Thursday’s Asian session.