06 Feb 2025 • 3 min read

# GBP Outlook: Will the Bank of England Cut Rates or Hold Tight? Feb 06, 2025 • 3 min read Team BitDelta Pro GBP Market Outlook The British Pound GBP is in a tricky spot as investors and analysts debate whether the Bank of England (BoE) will begin cutting rates soon… ###### Table of contents - [Mixed Signals from the Bank of England](https://bitdelta.pro/blog/gbp-outlook-will-the-bank-of-england-cut-rates/#section-0) - [Market Expectations from Thursday’s BoE Meeting](https://bitdelta.pro/blog/gbp-outlook-will-the-bank-of-england-cut-rates/#section-1) - [Technical Analysis](https://bitdelta.pro/blog/gbp-outlook-will-the-bank-of-england-cut-rates/#section-2) The British Pound GBP is in a tricky spot as investors and analysts debate whether the Bank of England (BoE) will begin cutting rates soon or keep them high for longer. With inflation still a concern and economic uncertainty lingering, markets are trying to predict the central bank’s next move. ## Mixed Signals from the Bank of England The BoE has been cautious about cutting interest rates, even as inflation has come down from its highs. The market is pricing in a 25-bps [rate cut](https://www.fxstreet.com/news/boe-expected-to-trim-interest-rate-amid-steady-inflation-and-weak-economic-growth-202502060700) this Thursday, despite the central bank’s concern as this could make life more expensive for businesses and consumers. The inflation in the UK remains relatively high compared to other countries, and the labour market is still strong. If wage growth continues to push prices higher, the BoE may feel pressured to keep rates higher for longer to prevent another inflation spike. The bank’s latest economic projections predict slower growth and lower inflation in the coming years. GDP growth, which was previously expected to be 1.5% in 2025, is now likely to be revised to 1.0%, following zero growth in the third and fourth quarters of 2024. Inflation is expected to decrease over time, with the inflation rate projected to reach 1.7% by Q1 2027. Growth and Unemployment Last Forecasts ## Market Expectations from Thursday’s BoE Meeting There are layers of uncertainty around the GBP/USD exchange rate, as the pair has recovered slightly with a weaker dollar, but it remains unstable. A Dovish policy from BoE—before the US Federal Reserve—could push the GBP down again. If the Bank of England cuts rates on February 6 and marks a shift towards more aggressive easing to counteract the stagnating UK economy, it could be forced into abandoning the interest rate-cutting cycle as soon as the second half of 2025 as inflation risks grow. UK CPI Forecasts for 2025 The more dovish the outcome, the more the GBP could fall. A rate cut would make borrowing cheaper but could weaken the pound. The opposite scenario is also valid. If the BoE holds rates steady or signals a slower pace of cuts, the GBP might gain strength. ## Technical Analysis From a technical outlook, the GBP/USD is struggling to break above the key resistance near $1.2600. If the BoE cuts rates as expected, we could see the pair resuming a bearish trend towards the $1.2280 level. **Image Source:** TradingView \| For Illustrative Purposes Only Overall, the outlook remains uncertain. For now, the market should look for the BoE’s next move today, and much will depend on inflation data, wage growth, and global market trends later this year. Disclaimer 2025\. All rights reserved. This communication is for informational and educational purposes only and should not be construed as financial, investment, or legal advice. BitDelta does not guarantee the accuracy, completeness, or timeliness of the information provided. Trading in cryptocurrency markets involves substantial risk, including the potential loss of your entire investment. Users are advised to conduct their own research, exercise caution, and seek independent financial advice before making any trading decisions. BitDelta is not liable for any losses or damages arising from actions taken based on this communication. ##### Join BitDelta Pro today! 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