The British pound strengthened on Thursday after the Bank of England (BoE) delivered a cautious interest rate cut in a closely divided vote, signalling limited room for further monetary easing.

The British pound remained largely unchanged on Monday, as investors looked beyond reports of a possible end to the U.S. government shutdown and focused instead on upcoming UK economic data that could shape the Bank of England’s (BoE) next move.

The Bank of England (BoE) has voted narrowly to keep interest rates unchanged at 4.0%, but signs suggest a rate cut could come as soon as December.

Wage growth in the UK has slowed to its weakest pace since May 2022, signaling a stabilising labour market, according to official data from the Office for National Statistics (ONS).

Major brokerages including Goldman Sachs, Morgan Stanley, UBS, and BofA now expect the Bank of England (BoE) to hold off on further rate cuts this year, following the central bank’s decision on Thursday to pause after its quarter-point reduction in August.

The Bank of England (BoE) announced a quarter-point cut in its benchmark interest rate on Thursday, lowering it from 4.25% to 4%, but the decision exposed a sharp split among its policymakers.

The Bank of England (BoE) is confronting a challenging dilemma ahead of its upcoming policy meeting: inflation is accelerating once again, yet recent labor market data reveals growing signs that the UK economy requires support.

The Bank of England has lowered interest rates for the second time this year, responding to a combination of economic pressures, including the UK government’s recent budget and the impact of Donald Trump's election as US president.