Pound and Markets React to Bank of England's Rate Decision

The pound slightly recovered losses after the Bank of England maintained its interest rates at 4.5%, despite initial fears about U.S. tariffs' impact. Meanwhile, the market's attention is diverted towards Finance Minister Rachel Reeves's upcoming spring statement, which is anticipated to announce spending cuts.

The British pound rebounded marginally on Thursday following the Bank of England's announcement to keep interest rates steady at 4.5%, as many had anticipated. The currency nudged upwards, though still remained 0.2% down for the day, trading at $1.2973. This came after an earlier dip from a near five-month high of $1.3015.

Yields on the benchmark 10-year government bond saw a decrease of 6 basis points, standing at 4.628%, remaining largely unaffected by the central bank's decision. The FTSE 100 stock index also experienced a decline of 0.2%, yet outperformed broader global markets, which suffered as traders expressed concerns over growth prospects.

Market participants are now eagerly awaiting Finance Minister Rachel Reeves's spring statement, scheduled for next week. She is expected to propose spending cuts aimed at adhering to fiscal guidelines and mollifying skittish bond investors.

(With inputs from agencies.)