The pound euro (GBP/EUR) exchange rate is falling below €1.17, giving back yesterday’s gains.

The pound is falling after the BoE left interest rates on hold at 5.25%. The vote split was more hawkish than expected at 6-2-1, with 2 policymakers voting to hike rates.

But the central bank lowered its inflation forecast for the year, in a sign that it may be pivoting towards a rate-cutting cycle.

The euro is rising after core inflation cooled by less than expected to 3.3% YoY in January, down from 3.4%. Headline CPI cooled to 2.8% YoY, down from 2.9%.

SSeparartely manufacturing PMI confirmed the preliminary reading of 46.6.