The Bank of England maintained rates at 3.75%, triggering a sharp decline in GBP/USD before partial recovery near 1.3236.
GBP/USD fell sharply after the Bank of England (BoE) left interest rates unchanged at 3.75%, defying some expectations for a hike. The decision was backed by a 7–2 vote, with two members favoring a rate increase.
Prior to the announcement, markets had priced in a potential 25-basis-point hike, following recent inflation data. The BoE’s cautious stance contrasts with earlier signals of tighter policy, weighing on the pound.
The pair trimmed losses to trade near 1.3236 after the initial drop, reflecting mixed market reactions to the decision.