The Bank of England's meeting is scheduled for just a week ahead. For the British pound, this particular event, including the decision on interest rates and Andrew Bailey's statements, holds significant importance. As mentioned, the Federal Reserve will likely raise interest rates for the last time next week, at least according to market beliefs after the latest inflation report. On the other hand, based on the current inflation level, the Bank of England might implement five more rate increases. Undoubtedly, the state of the British economy, which has been facing significant growth challenges for several quarters but has not yet fallen into a recession, will play a crucial role. However, despite the economic conditions, inflation demands further attention.

Before the Bank of England meeting, analysts are speculating about Andrew Bailey's communication. After the successful inflation report in June, the Bank of England will adopt a more accommodating stance on monetary policy. The recent 50-basis-point rate increase has yet to be fully reflected in the consumer price index, indicating an ongoing slowdown. Two more rate increases are likely planned, but the real interest lies in what will occur after the rate reaches 5.5%, a peak level that currently seems improbable to surpass. This is the matter that Andrew Bailey needs to clarify.

Should the Bank of England governor signal that the next two rate increases will be the last, the demand for the British pound may continue to decline, leading to a new downward trend segment rather than a corrective one. On the other hand, if the market believes in further tightening up to 6%, the current trend segment may transform into a five-wave pattern.

Towards the end of this week, Deputy Governor Andrew Bailey, Dave Ramsden, stated that inflation has begun to slow down at the expected pace but remains excessively high. In addition to standard statements such as "further tightening will be required if inflation remains persistent," Ramsden mentioned that the pace of selling government bonds from the Bank of England's balance sheet may increase over the next 12 months. It's worth noting that reducing the central bank's balance sheet is another restrictive tool that reduces the money supply in circulation and, consequently, tames inflation.

For the British pound, a lot now depends on the 1.2840 level, from which a corrective upward wave might begin. However, the decline is not yet complete.

Based on the conducted analysis, the construction of the upward wave set is complete. I still find the targets in the range of 1.0500-1.0600 quite realistic and recommend selling the pair with these targets. The a-b-c structure appears comprehensive and convincing, and the close below the level of 1.1172 indirectly confirms this. Therefore, I continue to advise cautious selling of the pair with targets near 1.1034. Buying is considered quite risky, but above the level of 1.1172, it will appear more attractive.

The wave pattern for the GBP/USD pair indicates a decline in the upcoming weeks. It is essential to understand what we are observing: whether the fourth wave is being constructed in the upward segment or if the first wave is forming in a new downward trend. The successful attempt to break the level of 1.3084 (from top to bottom) led readers to open short positions, as mentioned in my recent reviews. The first target for the pair is 1.2840, which has already been reached. An unsuccessful attempt to break this level currently suggests a formation of an upward wave. However, if the attempt proves successful on Monday-Tuesday, the decline in quotes may continue as part of the first wave in the minimum necessary three-wave structure