The Bank of England lowers prices, but it is divided into a vote Sparks Rally GBP

forAsk of England (BOE) has reduced the main interest rate by 25 basis points to 4.25 %But the markets surprised by a 5-4 vote divided by 5-4 votes, sent the pound to the highest level in all fields.

In a major shift, two members of the Monetary Policy Committee voted to reduce half a larger point, while two others preferred to maintain rates at 4.5 %. This three -way division revealed a much stronger dispute within the committee What analysts expected.

Main meals:

• The Bank of England has reduced a 25 -point bank price to 4.25 % from 4.5 % as expected widely
• The MPC Monetary Committee (MPC) presented an unexpected division of 5-4 voting
  • 5 to cut 25 bits per second, 2 for 50bp, 2 to not change
  • Dhingra and Taylor A. The largest 50 basis points
  • Man and Silil wanted to keep the rates It has not changed at 4.5 %
• BOE maintained its “gradual and cautious” approach to future price discounts
• MPC updated economic expectations
  • gross domestic product Expectations were raised to 1 % for 2025 (from 0.75 %), but decreased to 1.25 % for 2026 (from 1.5 %)
  • Economic inflation It is expected to reach its peak by 3.5 % in 2025 Q3 before returning to the target
  • Unemployment It is expected to rise to 5 % by the end of 2026
• Amendments related to tariffs MPC
  • You expect the definitions of GDP in the United Kingdom will reduce 0.3 % over a period of three years
  • You expect the definitions of inflation in the UK by 0.2 percentage points within two years

Link to the Monetary Policy Statement England (May 2025)

A separate report showed that the Bank of England now believes that the economy is facing a difficult budget law – while the growth of the main GDP has seemed strong in the first quarter by 0.6 %, and the bank indicated that this is driven by “wrong factors” and that is estimated The main growth was actually around zero.

The committee also highlighted that developments related to trade in financial markets have generally decreased on growth, including by estimating the British pound.

Link to the Monetary Policy Report at the Bank of England (May 2025)

In this uproar, Governor Billy stressed the need to be careful amid unpredictable global circumstances. “The past few weeks have shown the unpredictable global economy. For this reason We need to adhere to a gradual and accurate approach,And he stated. Billy welcomed reports of a possible trade deal in the United States of America, but indicated that Britain will continue to decline through the weakest global demand if the definitions remain on other countries.

Billy also highlighted that The monetary policy was “not on a prior path” And that the committee “will remain sensitive to increase the ability to predict the economic environment.” When asked about future price discounts, he confirmed this Decisions will be made at the meetingEnhancing the market perceptions of a more careful approach than some expected.

Link to the press conference of ruler Box B. Billy (May 2025)

Market reaction

British pound against major currencies: 5 minutes

Traders soon expanded the scope of bets to reduce follow -up in June, as markets are now pricing less than 20 % of the chance of about 50 % before the decision.

The British pound, which was circulating with caution before the release, fluctuated up after the Bank of England’s decision. Steling maintained its upward momentum through the press conference of the Governor Billy and until the American session was opened when other stimuli pushed the main currencies around it.

This height of the pound reflects the restoration of prices for prices, as the market explains today’s decision as “Hokash cut“This indicates a decrease in price rates forward, which was previously expected.

The announcement of the commercial deal of the United States of America helped improve risk morale during the American session, which led to a decrease in GBP against the US dollar and “risk” currencies such as Australian dollars and New Zealand. However, the pound was crowned today against the majors except the dollar.