Pound Sterling: Bank of England Cutting Cycle "set to Extend"

Modified: Friday, 7 November 2025 08:45 BST - Written by Tim Boyer

STORY LINK Pound Sterling: Bank of England Cutting Cycle "set to Extend"

The Bank of England (BoE) Monetary Policy Committee (MPC) held interest rates at 4.00% following the latest policy meeting.

The decision was in line with consensus forecasts, but the narrow vote in favour and the position of Governor Bailey will increase speculation of a December move and this limited Pound support.

The Pound to Dollar (GBP/USD) exchange rate traded around 1.3070 from 1.3090 ahead of the vote, with the Pound to Euro (GBP/EUR) exchange rate just below 1.1350.

There was a narrow 5-4 majority for the vote as Dhingra, Taylor, Ramsden and Breedon voted for a further 25 basis-point cut to 3.75%.

Four of the five members who voted for no change noted the risk of persistent inflation pressures while Governor Bailey considered that the inflation outlook was now more balanced, but that it was prudent to wait for further evidence.

The dissenting members considered that disinflation had become better established, while two of the four remained particularly concerned over downside risks.

According to the statement, more evidence is needed to be sure that inflation is on track to return to 2%.

It did, however, add, “the recent data suggested that the risk from greater inflation persistence had become less pronounced, and the risk to medium-term inflation from weaker demand more apparent, such that overall the risks were now more balanced.”

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TAGS: Pound Sterling Forecasts