The British Pound pushed higher late on Monday as traders rethink how aggressively the Bank of England will ease policy this year. Hopes for rapid rate cuts have faded after strong UK retail sales, stubborn inflation in January, and continued wage growth forced investors to scale back expectations.
Markets now see two more rate cuts in 2025, following the BoE’s decision to lower borrowing costs to 4.5% earlier this month. However, analysts at TD Securities take a more aggressive view, predicting four additional cuts—though they’ve postponed their expected timeline from March to May, citing the UK’s stronger-than-expected economic performance.
For now, all eyes are on upcoming speeches from key BoE figures, including Deputy Governor Dave Ramsden. If policymakers signal hesitation about easing too quickly, the Pound could find further support. Meanwhile, fresh PMI data paints a mixed picture—manufacturing continues to struggle, while services are keeping the economy on its feet. With so much uncertainty in the mix, traders will be hanging on to every word from the BoE in the days ahead.
