18.09.2025 17:59
The British Pound Sterling (GBP) experienced a pullback from its initial gains on Thursday, grappling with selling pressure following the Bank of England's (BoE) latest monetary policy announcement. The central bank, as widely anticipated, opted to maintain interest rates at 4%, a decision reached with a 7-2 majority vote among its policymakers. This development has currency markets closely monitoring the upcoming US Initial Jobless Claims data for the week ending September 12, adding another layer of uncertainty to global financial sentiment.
The BoE's decision to hold borrowing costs steady was largely foreseen by financial analysts, primarily attributed to the persistent inflationary pressures within the United Kingdom. Recent data underscored this concern, with the Consumer Price Index (CPI) remaining stubbornly high at 3.8%, marking its peak level since early 2024. Against this backdrop of elevated inflation, the central bank's Monetary Policy Committee (MPC) chose a path of stability, prioritizing the existing rate environment.
Within the MPC, a notable divergence of opinion emerged, with members Swati Dhingra and Alan Taylor advocating for a looser monetary policy stance, while their seven colleagues voted to preserve the status quo. Taylor, whose stance was particularly scrutinized, had previously articulated his concerns before the House of Commons’ Treasury Committee earlier this month. He argued vehemently that further monetary policy easing was crucial to invigorate sluggish economic growth, dismissing the notion that high inflation would prove enduring. Furthermore, Taylor cautioned that an overly restrictive policy in the current economic climate risked inflation undershooting its target, potentially plunging economic activity into weakness or even recession.
Conversely, BoE Governor Andrew Bailey reaffirmed his commitment to a "gradual and careful" methodology concerning any further unwinding of monetary policy restraints. This cautious approach signals the central bank's intent to navigate economic challenges with measured steps, avoiding any abrupt shifts. Amidst these varied perspectives, the Pound Sterling registered a mixed performance against its major counterparts, notably demonstrating its strongest showing against the New Zealand Dollar among the listed currencies, according to data from various internet sources.
