The pound-euro (GBP/EUR) exchange rate is falling from a five-month high.
The pound fell sharply after the BoE kept rates at 3.75% but delivered a far closer-than-expected vote. The 5–4 split, versus forecasts of a 7–2 vote, boosted expectations of a rate cut as early as March.
The BoE also downgraded growth forecasts and raised its unemployment outlook, expecting weaker labour conditions to ease inflation toward 2% by April.
The EUR is rising after the ECB left rates unchanged at 2%, noting economic resilience despite a challenging global backdrop.
Policymakers shrugged off cooler-than-expected inflation and possible deflationary pressures from euro strength.