UK Economic Data and GBP Impact💱 ForexGBP/USD

UK Inflation Cools, Rate Cut Bets Weigh on Pound

February 18, 2026, 06:02 PM154 words10 sources
GBP/USD
UK Inflation Cools, Rate Cut Bets Weigh on Pound

Photo: Pexels / Atlantic Ambience

Recent UK economic data paints a picture of cooling inflation and a weakening labor market, intensifying expectations of Bank of England (BoE) interest rate cuts. January's CPI fell to 3% year-over-year, in line with forecasts, while employment increased by a smaller-than-expected 28.6K, pushing the unemployment rate to 5.2%. Wage growth also slowed. While the CPI print was slightly stronger than anticipated in some core measures, particularly services, most analysts, including MUFG, maintain the BoE is on track for a 25 basis point cut in March. The BoE’s February meeting already saw four members voting for an immediate cut. This dovish shift has pressured the Pound Sterling (GBP), with GBP/USD trading volatile around 1.3560 and facing technical bearish signals, potentially targeting 1.3400. The Bank of Japan’s potentially hawkish stance is also contributing to GBP/JPY declines. Market focus now shifts to the FOMC minutes for signals on US rate cuts, which could further influence currency movements.

Source Articles

This article is based on analysis of 10 source articles from our news database.

  1. 1
    FXStreet··fxstreet.com·
  2. 2
    FXStreet··fxstreet.com·
  3. 3
    Learn Forex Trading With Babypips··babypips.com·
  4. 7
    FXStreet··fxstreet.com·
  5. 9
    FXStreet··fxstreet.com·
  6. 10
    FXStreet··fxstreet.com·