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What does interest rates being held by BoE mean for the Pound?

ended 20. June 2025

The Bank of England has held its interest rates at 4.25%. Six voted in favour of it being held, while three voted in favour of it being cut by 0.25%.

  • What does this mean for the Pound? How low could it go?
  • Does the fact that three members voted for a cut change prospects for the Pound?
  • What other factors are against the Pound at the moment?

Views ASAP please.

2 responses from the Newspage community

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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
In April, the Pound fell to just above 1.15 against the Euro, its lowest level since December 2023. After today’s BoE vote, it is likely to slide back there again. The recent soft UK economic data has left the markets pricing in an 85% chance of an interest rate cut when they next meet on 7 August. Against the US Dollar, the Pound is also on the slide from the 39-month high registered last week. The more the war drums beat, the more investors will seek shelter in the ultimate safe haven currency, the US Dollar. The only potential bright spot for the Pound could be against the high-yielding currencies like the Australian and New Zealand Dollars and the South African Rand if risk continues to be taken off the table due to geo-politics. The final nail in the UK economic coffin could come with the autumn budget, where further tax increases are increasingly likely. What a mess.
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Premium
Prem Raja
Head of Trading Floor at Currencies 4 You
The Bank of England held rates at 4.25% today, and while three members voted for a cut, Sterling actually firmed post-announcement, up 0.2%, signalling resilience. Despite the dovish tilt, GBP/USD remains supported due to rising geopolitical tensions and growing global tariff disputes, particularly between the US, China, and EU. These uncertainties are prompting a shift away from riskier emerging market currencies and even the Dollar at times, with the Pound benefiting as a relatively stable G10 alternative. If the UK avoids deep rate cuts and maintains monetary stability, GBP/USD could remain buoyant and even push towards 1.40 in the near term. The UK’s lower inflation versus the US, alongside safe-haven diversification flows, supports this view. While challenges remain, Sterling has shown strength throughout 2025 and may continue to surprise to the upside, especially if global trade tensions escalate and investors rotate capital into undervalued currencies like the Pound.