Forex News: Pound Slides Amid BoE Rate Cut Speculations

Pound Slides Amid BoE Rate Cut Speculations

(RTTNews) - The British pound weakened against other major currencies in the European session on Thursday, as a recent softer-than-expected U.K. inflation data bolstered expectations among traders that the Bank of England (BoE) will cut rates at its March 19 meeting.

Recently, the U.K. Consumer Price Index (CPI) inflation rate dropped to 3.0 percent in January from 3.4 percent in December, according to the Office for National Statistics (ONS). This is the lowest reading since mid-2025 and a more severe reduction than anticipated.

With markets now pricing over 80% odds of a 25-basis point reduction, the decline strengthened expectations that the Bank of England (BoE) will lower rates at its meeting on March 19.

In a testimony before the Treasury Committee of parliament on Tuesday, the BoE Governor Andrew Bailey had previously described a March cut as "a genuinely open question," while pointing out that the BoE's forecasted 4.4% rate of services price inflation has not decreased as much as expected.

The Pound Sterling is impacted by political risks in the UK due to an impending election to fill a parliamentary seat.

Any winner will likely represent a minority of voters, according to polls that show Reform UK, Greens, and Labour clustering around 27-28% support. A win for the Greens or Reform UK would be seen as a prelude to the UK elections in May and 2029.

European stocks traded lower despite strong earnings and guidance from chipmaker Nvidia.

The AI bellwether forecast first-quarter revenue above market estimates, helping ease concerns that momentum in artificial intelligence spending was cooling.

Investors weigh the impact of new U.S. tariffs on global growth and monitor ongoing frictions in the Middle East.

The U.S. Supreme Court's decision to block a pillar of U.S. trade policy has caused yet more uncertainty for trade partners and companies.

It remains unclear what will happen to nearly 20 framework deals or firmer trade agreements that the Trump administration has reached with countries in recent months.

Geopolitical risks also remain on investors' radar before a fresh round of nuclear talks between the U.S. and Iran in Geneva, Switzerland.

U.S. Secretary of State Marco Rubio said Iran possessed a very large number of ballistic missiles that threaten U.S. interests in the region and it was trying to develop weapons that can reach the continental United States.

In the European trading today, the pound fell to 1.315 against the U.S. dollar, from an early 8-day high of 1.3575. The next possible downside target for the pound is seen around the 1.33 region.

Against the euro, the Swiss franc and the yen, the pound slipped to 0.8731, 1.0453 and 210.84 from early highs of 0.8712, 1.0476 and 211.79, respectively. If the pound extends its downtrend, it is likely to find support around 0.88 against the euro, 1.03 against the franc and 207.00 against the yen.

Looking ahead, Canada current account for the fourth quarter and average weekly earnings for December, U.S. weekly jobless claims data and U.S. Kansas Fed composite index for February are slated for release in the New York session.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2026 RTTNews.com. All Rights Reserved

Market News provided by RTTNews