Bank of England Holds Rates Steady, Pound Falls Against Peers

The British pound fell against its major trading partners on Thursday after the Bank of England's (BoE) decision to hold interest rates at 5.25%. The move, which was widely expected by markets, still triggered a sell-off in sterling due to the accompanying policy statement's cautious tone on the economic outlook.

The Monetary Policy Committee (MPC) voted 6-3 to maintain the Bank Rate, with the minority favoring a 25-basis-point cut. This decision keeps borrowing costs at their highest level since early 2008. In its statement, the BoE noted that inflation remains above the 2% target and that services price pressures are proving stickier than anticipated.

GBP/USD fell below 1.2700, marking a decline of roughly 0.5%, while GBP/EUR slipped toward 1.1650. The moves reflect a broad reassessment of the relative pace of monetary easing between the UK and other major economies.