BoE Holds Rates but Upgrades Inflation Outlook; GBP Falls Short-Term

English summary

The Bank of England held rates at 3.75% with a 6-3 vote but significantly upgraded its inflation peak forecast to over 4% by early 2027 from the previous 3.2%, warning that policy tightening may be needed if Middle East conflicts persist. Following the decision, GBP/USD dropped approximately 30 points to 1.3378 as markets repriced the interest rate path.