The pound euro (GBP/EUR) exchange rate is falling after gains yesterday.
The pound is falling despite the BoE leaving interest rates unchanged at 4% in line with expectations. The vote split was as expected at 7-2.
The BoE also slowed the pace of gilt selloffs to £70 billion per annum from £100 billion.
With inflation sticky at 3.8% in August and growth stalling, the UK economy is in stagflation. The central bank reiterated it will stick to a careful and gradual approach to rate cuts.
The EUR is rising amid a quiet economic calendar.
Germany’s government passed its first budget since it loosened fiscal rules earlier this year. The budget allocates large new sums to the military.