Bank of England (BoE) Policy & GBP💱 Forex•GBP/USD

BoE Dovishness Weighs on GBP, Rate Cut Bets Surge

February 6, 2026, 06:01 PM163 words10 sourcesAI-Generated · Reviewed by editorial team
GBP/USD
BoE Dovishness Weighs on GBP, Rate Cut Bets Surge

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The Bank of England’s recent policy decision, marked by a surprisingly dovish stance and a 5-4 vote to hold rates at 3.75%, has significantly pressured the British Pound (GBP). Four members of the Monetary Policy Committee voted for an immediate rate cut, signaling growing concern about the economic outlook and a willingness to ease policy. Market expectations for a March rate cut have jumped to nearly 70%, up from under 20% previously, with ING and others now favoring a cut in March. This shift is driven by lower inflation forecasts and a perceived willingness from the BoE to avoid 'overinterpreting' temporary dips in inflation. The dovish tilt, combined with rising UK political risks, has led to a decline in GBP/USD, testing its 200-day moving average around 1.3430. EUR/GBP has risen, finding support around 0.8670/80, with some analysts predicting a move towards 0.88. While political uncertainty may delay the easing cycle, the overall outlook for the GBP remains bearish as rate cut expectations solidify.

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