FX.co ★ Pound Cuts Some Gains After BoE Decision

The British pound hovered around $1.305, slightly reducing earlier gains and remaining close to a recent seven-month low of $1.301. This movement followed the Bank of England's decision, with a 5–4 vote, to maintain its policy rate at 4%. This decision reflects the Bank's assessment that CPI inflation has likely reached its peak. Interestingly, four committee members advocated for a 25 basis point rate cut to bring the rate down to 3.75%, which exceeded market expectations. The Bank of England noted a diminishing risk of sustained inflation, while highlighting increased concerns over weakened demand, thereby presenting a more balanced economic outlook. Policymakers also indicated that if disinflationary progress persists, the Bank Rate may gradually decline. However, they stressed that more evidence is required before they consider further policy easing.