GBP/EUR Falls as BoE Holds Rates Amid Inflation Concerns

The Bank of England's interest rate decision on Thursday led to a decline in the Pound to Euro exchange rate. The GBP/EUR rate was trading at around €1.1654, down from its opening levels.

The BoE's policymakers voted to leave interest rates unchanged, with the decision passing by a 6-3 majority despite concerns about inflation.

The voting split and cautious language in the accompanying statement disappointed GBP investors who had anticipated additional monetary tightening before the end of 2026.

However, the BoE's decision to reduce the pace of its quantitative tightening programme provided some support for sterling, triggering a sharp drop in UK gilt yields that eased pressure on the Pound.