Pound Sterling Dips Against Euro and Dollar on Bank of England Hotd

Published: Friday, 19 September 2025 09:00 BST - Written by Frank Davies

STORY LINK Pound Sterling Dips Against Euro and Dollar on Bank of England Hotd

The headline Bank of England (BoE) policy decision was in line with consensus forecasts, but the Pound lost some ground against the Euro and US Dollar after the decision as the bank did note evidence of a weaker labour market.

The Pound to Dollar (GBP/USD) exchange rate dipped to 1.3625 from 1.3660 while the Pound to Euro (GBP/EUR) exchange rate retreated to 1.1520 from 1.1540.

The Bank of England (BoE) Monetary Policy Committee (MPC) held interest rates at 4.0% at the latest policy meeting, in line with strong consensus forecasts.

There was a 7-2 vote for the decision with Dhingra and Taylor voting for a further 25 basis-point cut to 3.75%.

This vote split was also broadly in line with market expectations.

The bank will also sell a further £70bn in government bonds over the next 12 months from £100bn now. Again, there was a split vote with chief economist Pill voting for a £100bn reduction while Mann preferred £62bn.

UK bonds briefly dipped lower on the announcement before regaining ground while there was no significant change in expectations surrounding November with around a 25% chance of a rate cut.

The committee remained uneasy over underlying inflation trends; “Upside risks around medium-term inflationary pressures remain prominent in the Committee’s assessment of the outlook.”

There were no significant changes in guidance with comments that; “A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate.”

It did, however, add that slack is building slowly in the labour market.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts