Steady Pound Holds Firm as BoE Decision Looms

The British pound remained steady ahead of the Bank of England meeting, despite high inflation and sluggish growth. The BoE is expected to cut interest rates, which may impact the pound's value. Traders are cautiously optimistic, reflecting a balanced outlook amid economic uncertainties.

The British pound maintained its stability on Wednesday, as market watchers awaited the Bank of England's rate decision and monitored developments in the U.S. President Donald Trump is reportedly looking to reshape the Federal Reserve's board, adding a complicating factor to global financial dynamics.

Britain's central bank is widely expected to lower interest rates to 4% on Thursday from 4.25%, marking the fifth cut in this cycle. However, with inflation well above the 2% target, some Monetary Policy Committee members might oppose further reductions.

The pound, slightly stronger against the dollar, faced setbacks against the euro amidst a troubled UK economy battling high inflation and weak growth. With the pound's year-to-date gain shrinking, any surprise dovish signals or tax hike indications in the autumn budget could trigger a sell-off.

(With inputs from agencies.)