4 min readThe BoE left interest rates unchanged at 4.75%, in line with expectations. However, the vote was slightly more dovish than expected at 6 – 3, with 6 voting to hold and 3 voting to cut rates by 0.25%. Expectations had been for a vote of 8-1.
The central bank signaled that it will keep easing monetary policy gradually in 2025 despite evidence of lingering inflation. Data earlier in the week showed that UK inflation rose to 2.6% YoY in November, up from 2.3% However, the BoE now expects growth to be flat in Q4 compared to previous projections of 0.3%, raising concerns of stagflation.
GBP VS DOLLAR (GBP/USD):
If we take a closer look at the technicals, we can observe how price was trading just below 1.2630 before the news release, and post the release we have seen price action push lower into the 1.26 region. While the price trades -0.2% lower following the decision, it still trades +0.2% on the day.
FTSE 100 (UK100):
The FTSE 100 has also seen a direct impact from this BoE interest rate decision, as we saw price trading at just below 8080 before the announcement, and currently we are trading just above 8110. Marking a slight increase of over 0.3% within the hour.
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