At its September meeting, the Bank of England (BoE) held its policy rate at 3.75%, as markets had anticipated. The vote, however, exposed a split on the Monetary Policy Committee (MPC) as three members supported a 25-basis-point hike.

Highlights from the BoE monetary policy summary

Inflation risks are tilted to the upside relative to the July central forecast.

The MPC repeats its July statement that there is “little evidence so far” of material second-round inflation effects.
Third-quarter GDP growth is expected to be +0.4% (July forecast: Q3 +0.1%).
The MPC voted 6-3 to hold rates at 3.75% (Reuters poll: 6-3 vote for 3.75%).
Chief Economist Pill and MPC members Greene and Mann voted to raise rates to 4%.
The MPC voted 9-0 to unwind QT at an average annual pace of £46 bln a year through to 2034 (BoE market poll: £50 bln pace for 2026/27).
APF gilt auctions will be paused until April 2027 while the BoE considers selling gilts to the government rather than to the market.
The QT unwind plan will involve annual sales of £20 bln a year alongside maturing gilts (BoE market poll: £19.5 bln active sales for 2026/27).
£222 bln of gilts maturing earlier than 2035 and £120 bln of gilts maturing between 2049 and 2071 will be held to maturity (BoE market poll: 2026/27 sales 43% short, 41% medium and 16% long).
Long-dated gilts will be held in the APF to back banknotes, not for monetary policy, and will be replaced as they mature.
Consumer price inflation is expected to exceed 4% in early 2027 (July forecast: peak of 3.2% in October-November 2026).
Policy may have to tighten if the conflict in the Middle East persists for an extended period, as appears likely, and if the risk of second-round effects increases.

Market reaction to BoE policy announcements

Following the BoE’s interest rate decision on Thursday, GBP/USD is surrendering its initial recovery and is resuming its decline, adding to the ongoing bearish trend and revisiting the 1.3360 zone.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Canadian Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

This section below was published as a preview of the Bank of England's (BoE) interest rate decision at 09:30 GMT.

• The Bank of England is expected to keep its policy rate at 3.75%.
• UK inflation figures remain well above the BoE’s target.
• GBP/USD remains below the 1.3500 mark, close to its key 200-day SMA.

The Bank of England (BoE) is set to reveal its latest monetary policy decision on Thursday, coinciding with its sixth rate-setting meeting of 2026.

Market analysts expect the central bank to keep its benchmark interest rate steady at 3.75%, which should be its sixth hold in a row following December’s 25-bps rate cut.

The Monetary Policy Committee’s (MPC) decision will be followed by the release of Meeting Minutes, which will detail the internal discussions that shaped the outcome.

The central bank maintained interest rates at 3.75% in July, despite a surprisingly hawkish 6-3 vote from the MPC that indicated increased anxiety about the inflationary effect of the Iran conflict. In addition, Governor Andrew Bailey said there was no sign of second-round consequences yet, but that continued conflict and wider pricing pressures would likely require higher interest rates.

Attention remains broadly on inflation and geopolitics

At the latest Treasury Select Committee hearings on September 8, policymakers have sought to push back against the idea that a rate hike is inevitable, while acknowledging that the inflation outlook remains highly sensitive to geopolitical and energy-market developments.

That said, Governor Andrew Bailey argued the increase in market-implied rates partly reflected a risk premium linked to the possibility of further energy-price rises, rather than the BoE’s most likely policy path.

The MPC’s internal debate nevertheless remains finely balanced: Deputy Governor Dave Ramsden described domestically generated inflation pressures as “relatively benign” amid softer labour-market conditions, while Alan Taylor argued that keeping rates at restrictive levels offered insurance against external inflation risks. Megan Greene, who voted to raise the Bank rate from 3.75% to 4.00% in July, struck a more hawkish tone, warning that a prolonged oil-price shock could become embedded in inflation expectations.

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

Despite being a close call, market participants appear to lean toward another steady hand by the BoE on Thursday at 11:00 GMT.

Other than the rate decision per se, attention will also focus on the vote split among MPC members, which might be a market mover for the British Pound if it indicates an unusual outcome.

In the run-up to the meeting, GBP/USD navigates the lower end of the current multi-week range in the mid-1.3400s, confronting at the same time its critical 200-day SMA.

"Cable came under fresh downside pressure in the last few days, exclusively following US Dollar dynamics. Further weakness could see the provisional 100-day SMA around 1.3440 retested in the short-term horizon," said Pablo Piovano, Senior Analyst at FXStreet. Further south, there are no support levels of note until the late-July trough at 1.3273 (July 28).

On the upside, Piovano identified the monthly high at 1.3567 (September 9) as the first level to watch, followed by the August ceiling at 1.3675 (August 21).

“Momentum indicators seem to favour extra losses, as the Relative Strength Index (RSI) declines toward the 40 zone, while the Average Directional Index (ADX) around 21 is indicative of a fairly firm trend,” he concludes.

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Economic Indicator

BoE Minutes

The minutes of the Bank of England (BoE) Monetary Policy Committee (MPC) meetings are published alongside the committee decision. The minutes give a full account of the policy discussion, including differences of view among members. They also record the votes of each member of the MPC. Generally speaking, if the BoE is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the GBP.

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