12:00 PM GMT, United Kingdom, BoE interest rate decision:
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Reference rate: actual: 3,75%, forecast: 3,75%, previous: 3,75%
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Vote split (hike-hold-cut): actual: 0-5-4, forecast: 0-7-2, previous: 0-4-5
The pound is extending its decline (GBPUSD down 0.8%; EURGBP up 0.6%), driven by a dovish split in the MPC vote, where four members favored an immediate rate cut (vs. two expected). The dip comes despite significant pressure already recorded during early trading. In the debt markets, two-year gilt yields retreated to approximately 3.65% after the central bank opted to hold rates.
Swap markets have aggressively ramped up bets for monetary easing in 2026, now pricing in nearly two full rate cuts (-44 basis points) by year-end. This dovish shift in expectations is largely a reaction to the Bank of England’s updated economic projections. The central bank lowered its 2026 GDP growth forecast from 1.2% to 0.9% and now sees inflation falling to 2.1% (down from 2.8% previously), with expectations that it will undershoot the 2% target throughout 2027 and 2028.

Source: xStation5
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