The Bank of England (BoE) has reduced its rates, a decision narrowly split among its members. The cut suggests that they are nearing the end of the easing cycle, with another predicted for early 2026.<\/p>\n
Sterling gained slight strength following the unexpected hawkish tone of the BoE, as the market remains divided about whether further cuts will occur by February or March. Amidst a soft US Dollar, the British Pound is expected to experience an improvement in market positioning.<\/p>\n
In related financial news, Bitcoin holds steady around $87,000 due to a rise in ETF inflows, while Ripple finds support at $1.82 amidst cautious sentiment in the broader cryptocurrency market. Ethereum clings to $2,800 as minor outflows affect its recovery.<\/p>\n
Gold remains around $4,330, unable to gain speculative attention despite central bank announcements and US inflation updates. The US CPI rose by 2.7% year-on-year in November, aligning with the Fed’s targets, affecting currency and precious metal markets. Meanwhile, EUR\/USD approached the 1.1700 mark due to unchanged interest rates and revised forecasts by the ECB.<\/p>\n
The Bank of England’s rate cut today, December 18, 2025, came with a heavily divided vote, signaling we are at the endgame for monetary easing. We should only expect one more cut in the first quarter of 2026, which is a relatively hawkish stance. This contrasts with the softer inflation data we’ve seen coming out of the US, which could lead to more aggressive cuts from the Federal Reserve.<\/p>\n
This cautious approach from the Bank makes sense when we look at the data from last month. The Office for National Statistics reported that November’s headline CPI was 2.1%, barely above the Bank’s 2% target. With the economy showing only marginal 0.1% growth in the third quarter, the BoE is balancing a fine line between stimulating growth and keeping inflation in check.<\/p>\n
The split vote suggests future policy decisions will be highly data-dependent and uncertain, which means we should expect sterling volatility to pick up. We saw a similar spike in volatility back in 2022 when central banks began their aggressive hiking cycles. Options strategies that benefit from a rising GBP\/USD, such as buying call spreads, could be a good way to manage risk while positioning for further sterling strength.<\/p>\n
We believe speculative positioning has been leaning bearish on the pound, expecting a more dovish BoE. Today’s “hawkish cut” could force a short squeeze, pushing GBP\/USD higher toward the 1.34 handle it tested earlier today. This strength could also be played against the euro, especially as the European Central Bank’s path remains less clear.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" BoE rate cut signals easing cycle\u2019s end; Sterling gains, Bitcoin steady, gold stalls, EUR\/USD nears 1.1700.<\/p>\n","protected":false},"author":62,"featured_media":17036,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-37244","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37244"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37244\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17036"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}