Bank of England Cuts Interest Rates

The British pound experienced a notable increase in value against the euro this Thursday, following the Bank of England's decision to lower its key interest rate by 25 basis points to 4.25%. This move was in line with market expectations, yet it sparked a significant reaction in currency markets.

Governor's Cautious Stance

Despite the unanimous vote by the Monetary Policy Committee for the rate cut, Governor Andrew Bailey expressed his initial indecision, hinting at a more cautious approach to future monetary easing. His comments have left markets speculating about the timing and extent of further rate adjustments.

Trade Deal Optimism Boosts Confidence

Adding to the pound's strength, Bailey's remarks on the anticipated UK–US trade deal, expected to be announced later in the day, suggested it could alleviate some economic uncertainties. This optimism has further bolstered investor confidence in the British currency.

By 2:09 pm CET, the pound had risen 0.33% against the euro, trading at 1.18003, and 0.25% against the US dollar, at 1.33288.