Bank of England: Cuts on the table, conviction still building
Di Pablo Piovano
Data di Pubblicazione: 24 Feb 2026 | Data di Modifica: 24 Feb 2026
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At the Treasury Select Committee (TSC) hearing following the February Monetary Policy Report, Bank of England (BoE) Governor Andrew Bailey struck a cautiously dovish tone, suggesting that with inflation returning to target, there should be scope for further monetary policy easing.
At the Treasury Select Committee (TSC) hearing following the February Monetary Policy Report, Bank of England (BoE) Governor Andrew Bailey struck a cautiously dovish tone, suggesting that with inflation returning to target, there should be scope for further monetary policy easing. He said he would head into upcoming meetings asking whether a cut was justified, stressing that a move at the next meeting was "a genuinely open question." While he expects inflation to return close to target in April and broadly sees room for cuts over the course of this year, he was careful not to pre-commit.
On the latest data, Bailey noted that headline inflation had come in broadly as expected. Goods price inflation was softer than anticipated, possibly reflecting developments in China, but services inflation had not eased as much as the Bank had hoped, a reminder that domestic price pressures remain sticky.
Chief Economist Huw Pill sounded more guarded. He acknowledged that in the past, the Bank may have placed too much weight on inflation being at the target at a point in time rather than focusing on future risks. In his view, the job of bearing down on inflationary pressures is not yet complete, implying that caution is still warranted even as the discussion shifts towards potential easing.
Taken together, the message was that cuts are clearly on the table for 2026, but not on autopilot. The direction of travel may be towards gradual easing, yet the pace will depend heavily on how services inflation and broader domestic pressures evolve in the months ahead.
Market reaction
The British Pound (GBP) now manages to gather fresh steam, prompting GBP/USD to advance to daily highs north of 1.3500 as investors continue to assess comments from BoE rate setters, while the US Dollar (USD) is also giving up some of its earlier gains.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | -0.19% | 0.75% | 0.08% | 0.00% | -0.13% | -0.03% | |
| EUR | -0.08% | -0.26% | 0.68% | 0.00% | -0.09% | -0.21% | -0.11% | |
| GBP | 0.19% | 0.26% | 0.95% | 0.26% | 0.19% | 0.05% | 0.15% | |
| JPY | -0.75% | -0.68% | -0.95% | -0.67% | -0.74% | -0.88% | -0.78% | |
| CAD | -0.08% | -0.01% | -0.26% | 0.67% | -0.08% | -0.21% | -0.09% | |
| AUD | -0.00% | 0.09% | -0.19% | 0.74% | 0.08% | -0.14% | -0.03% | |
| NZD | 0.13% | 0.21% | -0.05% | 0.88% | 0.21% | 0.14% | 0.10% | |
| CHF | 0.03% | 0.11% | -0.15% | 0.78% | 0.09% | 0.03% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
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