The British pound fell in European trading on Friday against a basket of global currencies, extending its losses for the third consecutive session against the US dollar and moving notably away from its highest level in two and a half months.

This decline comes amid ongoing correction and profit-taking, in addition to negative pressure from the outcome of the Bank of Englands latest monetary policy meeting.

In line with expectations, the Bank of England kept its benchmark interest rate unchanged at its lowest level in two and a half years, though the voting details surprised markets; seven members voted to maintain current rates, while two favored a 25-basis-point cut.

Price Overview

British pound exchange rate today: The pound fell against the dollar by about 0.2% to $1.3531, from the opening price of $1.3554, with the session high at $1.3560.

The pound lost 0.5% against the dollar on Thursday, marking its second straight daily decline, as correction and profit-taking continued from its two-and-a-half-month high at $1.3727, under pressure from the Bank of England meeting results.

Bank of England

In line with expectations, the Bank of England decided on Thursday to leave interest rates unchanged at 4.00%, the lowest since February 2023. It also said it would slow the pace of quantitative tightening and avoid selling long-term government bonds to limit the impact on volatile markets.

The decision passed with seven members voting to keep rates unchanged, while two supported a 25-basis-point cut to 3.75%. This split went against market expectations, which had forecast eight members voting for no change and just one for a cut.

In its monetary policy statement, the Bank of England said that any upcoming rate cuts would be cautious and gradual.

Andrew Bailey

Bank of England Governor Andrew Bailey said after Thursdays meeting that the Monetary Policy Committee is following a gradual and cautious approach to rate reductions, focusing on the medium-term upside risks to inflation, such as rising food prices that could influence wage agreements and exert pressure on long-term price levels.

UK Interest Rates

Traders increased their bets on further Bank of England rate cuts, expecting at least an additional 25-basis-point reduction this year.

Market pricing currently places the probability of a 25-basis-point rate cut at the November meeting above 50%.