Market Outlook: GBP Strengthens If BoE Approaches Rate Cuts With Caution

Forex - Commerzbank analyst Volkmar Baur stated that the British Pound is likely to rise if the Bank of England continues to gradually and cautiously lower interest rates. Baur mentioned that the BOE will not change interest rates in its decision at 15:00 GMT and will adopt a cautious stance regarding rate cuts next year. He noted, “Although yesterday's inflation data was slightly below analysts’ expectations, the anticipated stronger fiscal stimulus next year has raised growth and inflation expectations, so the central bank will act prudently today.” Baur emphasized that this caution is expected to support the Pound against the Euro in 2025. The GBP/USD exchange rate rose by 0.3% to 1.2611. The EUR/GBP increased by 0.1% to 0.8247.