There were no surprises from Bank of England’s decision of cutting interest rates yesterday by 25 basis points, now holding a base rate of 4.5%. Even if it was expected we did see motion on GBP-pairs, for example GBP/EUR fell below its psychological barrier of 1.20.
The market movement came after signals from BoE members voting, 9 versus 0 in favour of lowering borrowing costs and comments from Governor Andrew Bailey.
The British economy has barely shown signs of growth since the middle of 2024. Bank of England suggest that this will continue in the short-term with a bumpy road for the UK economy, with an uptick in inflation levels – down to uncertainty of global trade policies. The UK relies heavily on imports and upcoming international tariffs can easily lead to inflated prices for goods required from overseas.
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