Bank of England leaves policy rate unchanged at 4% as expected | FXStreet

The Bank of England announced on Thursday that it left the policy rate unchanged at 4% following the November policy meeting, as anticipated.

Developing story, please refresh the page for updates.

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This section below was published as a preview of the Bank of England’s (BoE) interest rate decision at 06:00 GMT.

• The Bank of England is expected to keep its policy rate at 4%.
• UK inflation figures remain well above the BoE’s target.
• GBP/USD continues to trade at the lower end of its range, just over 1.3000.

The Bank of England (BoE) will announce its latest policy decision on Thursday, marking its seventh rate meeting of 2025.

Most analysts expect the ‘Old Lady’ to hold fire and keep the base rate at 4%, following the cut delivered back on August 7. Once the announcement lands, the bank will publish the meeting Minutes, offering a closer look at the debate behind the decision.

The market’s base case is for no change, but a 25-basis-point cut isn’t completely off the table. With the UK economy looking increasingly fragile and the fiscal picture continuing to worsen, there’s still a case for the BoE to ease a little further.

Cooling inflation and fiscal woes

The Bank of England kept interest rates on hold at 4% in September, after the Monetary Policy Committee voted 7–2 to stay put. Members Swati Dhingra and Adam Taylor backed a 25-basis-point cut, following the quarter-point reduction delivered in August.

In its latest statement, the BoE stuck to its forecast that inflation will peak around 4% this month before gradually easing back to the 2% target by mid-2027. On growth, the bank staff expect GDP to rise 0.4% in the July-to-September quarter, hardly booming, but still avoiding contraction.

Fresh data from the Office for National Statistics showed headline CPI inflation rising to 3.8% in September, while core inflation (excluding food and energy) eased slightly to 3.5%. Services inflation, often watched closely by the BoE, stayed stubborn at 4.7%, suggesting that underlying price pressures haven’t fully cooled.

Meanwhile, the fiscal picture remains challenging. Chancellor Rachel Reeves warned on Tuesday that broad tax rises could be coming, as she seeks to avoid a return to austerity. She described her upcoming second annual budget as one built on “hard choices”, protecting public services while keeping Britain’s debt in check.

With the budget just three weeks away, Reeves painted a bleak backdrop: pandemic-era debt, weak productivity, and sticky inflation. Her comments hinted she might even break Labour’s election pledge not to raise major taxes: a politically risky move, but one aimed at reassuring investors that the government intends to keep borrowing under control.

In the meantime, recent remarks from BoE policymakers struck a more cautious tone:

• MPC member Megan Greene said a couple of weeks ago that she didn’t see a strong case for the bank to keep cutting rates at the current quarterly pace, though she also noted the easing cycle isn’t finished yet.
• Governor Andrew Bailey, for his part, pointed to the October labour market data as evidence that underlying inflation pressures are continuing to cool. He also flagged that ongoing tariff uncertainty is weighing on business investment decisions, though, for now, it doesn’t seem to be filtering through to prices.

How will the BoE interest rate decision impact GBP/USD?

Investors expect the BoE to retain its reference rate at 4% on Thursday at 12:00 GMT.

While the outcome seems to be fully priced in, attention will focus on the vote split among MPC members, which might be a market mover for the British Pound if it indicates an atypical vote.

In the run-up to the meeting, GBP/USD appears to have met decent contention near the psychological 1.3000 threshold for now.

“Cable came under some strong and persistent downside pressure after hitting monthly tops near 1.3730 on September 17,” said Pablo Piovano, senior analyst at FXStreet. He notes that a decisive break below 1.3000 could see the pair slip back to the April valley at 1.2707 (April 7).

On the upside, Piovano identified the key 200-day Simple Moving Average (SMA) at 1.3254 as an important hurdle, ahead of minor resistance levels at the weekly top at 1.3471 (October 17) and the October ceiling at 1.3527 (October 1).

Meanwhile, a technical bounce should not be discarded in the short-term horizon, as the Relative Strength Index (RSI) places a spot in the oversold region at around 24, Piovano concludes.