Currency news / November 7, 2025

Bank of England holds interest rates at 4%

3 min read Lawrence Kaplin

Lawrence KaplinNovember 7, 2025

Market snapshot:

USD: Eases back from recent highs
EUR: Sideways
GBP: Steadies up

Yesterday's currency recap

Sterling eked out small gains during yesterday’s trading session, after the Bank of England voted to hold interest rates at 4%, as was expected. The nine-member committee voted 5-4 in favour of leaving borrowing costs unchanged, in the face of higher inflation over recent months. The BoE said it expects inflation to have peaked and forecast a return to their 2% target in two years’ time, but warned growth remains weak and unemployment is rising.

Governor Bailey stated rates are "on a gradual path downwards" but stressed the MPC need to see more information on inflation and the outcome of the upcoming budget before cutting interest rates again.

Elsewhere the USD pulled back from recent highs after a weaker than forecast private payroll report from Challenger, Gray & Christmas, Inc showed employers cut more than 150k jobs in October which was in stark contrast to the recent strong ADP report.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.01%	2.0065
GBPCAD	0.05%	1.8415
GBPCHF	-0.03%	1.0565
GBPDKK	-0.05%	8.4715
GBPEUR	-0.04%	1.1345
GBPJPY	-0.08%	200.95
GBPNOK	-0.10%	13.3175
GBPNZD	0.18%	2.3095
GBPSEK	-0.17%	12.4625
GBPUSD	0.12%	1.3065

*Daily move - against G10 rates as of 06:00 GMT, 07.11.25
** Indicative rates - interbank rates as of 06:00 GMT, 07.11.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	German Industrial Production	Sep	3%	-4.30%
GBP	S&P Global Construction PMI	Oct	n/a	46.20
EUR	Retail Sales	Sep YoY	1%	1%
EUR	Retail Sales	Sep MoM	0.20%	0.10%
GBP	Interest Rate Meeting	Oct	4%	4%

Today's speeches

Fed’s Wiliams, Jefferson and Miran
ECB’s Nagel, Sleijpen and Elderson
BoE’s Pill

What we think

The 5-4 vote in favour of leaving interest rates unchanged highlighted the divergence amongst the committee members, which is of no surprise given the UK has the highest inflation rate amongst the G7 - standing at 3.8%, it’s uncomfortably above the Bank's mandated 2% target, whilst growth is stagnating.

This makes the next MPC meeting very difficult to call and Governor Bailey stressed the need for more information on the upcoming budget and inflation.

The much-rumoured tax rises, if delivered, by Chancellor Reeves would be perceived by the BoE as a pseudo tightening of monetary policy and would allow the Bank to cut rates at its December meeting.

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