The GBP/MXN currency pair pulled back from a 3-week high of 23.9994 on Tuesday ahead of the outcome of the Bank of England’s and the Mexican central bank’s policy meetings.
The Bank of England is expected to leave its benchmark interest rate intact at 3.75% at its February 5th meeting.
In December, the BoE reduced its policy rate by 25 basis points in a decision that revealed significant internal disagreement, with a 5-4 vote on the Monetary Policy Committee.
Four MPC members favored keeping the rate unchanged at 4.00%, highlighting ongoing divergence over the appropriate pace of easing.
The BoE had said that policy settings would follow a gradual downward trajectory rather than a sharp easing move. It said the scale of any additional rate reductions would depend on how the inflation outlook develops.
Inflation in the UK has remained well above the BoE’s 2% target, even after moderating in recent months. Headline Consumer Price Index rose 0.4% month-on-month in December, after a 0.2% drop in November. On a year-on-year basis, headline CPI picked up to 3.4% from 3.2%. And, core CPI inflation remained stable at 3.2%.
While BoE officials still saw room for more rate cuts over time, they warned that subsequent decisions on easing were becoming a “closer call.”
Meanwhile, Banco de México is largely expected to keep its key policy rate without change at 7% at its February 5th meeting, following 12 consecutive rate cuts in an easing cycle that began in March 2024.
The GBP/MXN currency pair was last down 0.43% on the day to trade at 23.6622.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
