Yesterday marked the first Bank of England (BoE) policy meeting of 2025, with the central bank cutting interest rates by 25 basis points to 4.50%. This decision was widely expected, and while the BoE remains cautious about further easing, market expectations now suggest UK interest rates could fall below 4% by year-end.
BoE Signals Gradual Approach to Further Rate Cuts
Despite speculation about a more aggressive rate-cutting cycle, the BoE has emphasised a cautious, gradual approach to further monetary easing. However, the divided vote within the committee has fueled debate over how quickly additional cuts could come. Investors will closely watch future economic data to gauge the pace of policy adjustments.
Sterling Weakens After BoE Decision
Following the rate cut announcement, sterling found itself under pressure, slipping against both the US dollar and the euro. The pound’s weakness reflects market sentiment that further rate cuts are likely, potentially reducing the currency’s appeal to investors.
US Payrolls Data in Focus – Key Market Risk Ahead
With attention shifting to the US economic calendar, today brings a key event risk for the dollar. The market will closely monitor:
📌 US Non-Farm Payrolls (NFP) Report – A stronger-than-expected jobs report could boost the dollar, adding further pressure on GBP/USD.
📌 Other US Employment Data – Additional indicators of labour market strength may influence Federal Reserve rate expectations and impact global currency movements.
Navigating Market Volatility
With BoE policy shifts and major US economic data releases shaping market sentiment, businesses and investors should stay prepared. Whether you’re looking to hedge currency risk or capitalise on market movements, speak to a QuMoney expert today.