The UK pound sterling, paired with the US dollar, returned to decline. The current GBPUSD exchange rate stands at 1.2616.
The Bank of England may ultimately outpace the US Federal Reserve and the ECB in softening monetary policy.
At the March meeting, the BoE left the interest rate unchanged at 5.25% per annum and maintained forecasts for inflation and economic recovery. However, two monetary policymakers who had previously insisted on raising the interest rate have now softened their stance, giving the bank's decision a more confident tone.
In recent months, market confidence that the Bank of England will decrease its monetary policy slower than the Fed and ECB significantly supported the pound. This also meant lending rates in the UK would be higher than elsewhere. However, the market reversed. Investors consider that the Bank of England might become the first of the three central banks to cut rates. The next Bank of England meeting is scheduled for 11 April. The probability of an interest rate decrease is estimated at 13-15%.
The GBP seems to have a reserve of strength to withstand any bearish attacks, and the UK economy, having survived two years of continuous interest rate hikes and rapid increases in energy prices, has only experienced a short recession. Macroeconomic indicators have been improving lately, which is a positive signal.