Rabobank says the BoE’s 6–3 hold was less hawkish than the vote implied, with policymakers content to wait for clearer evidence of second-round inflation.
The Bank of England kept interest rates unchanged at 3.75% on Thursday, but a surprisingly hawkish 6–3 vote failed to generate lasting support for Pound Sterling.
Huw Pill, Megan Greene and Catherine Mann all preferred an immediate increase, yet Rabobank’s conclusion was blunt: “Ignore the vote surprise, guidance a little less hawkish, Committee happy to keep waiting.”
The Pound to Dollar exchange rate (GBP/USD) was still 0.2% higher on the day at around 1.3394, helped by the previous evening’s post-Fed Dollar weakness, while the Pound-to-Euro rate (GBP/EUR) slipped marginally to 1.1655.
The vote initially looked like the main story. Rabobank had flagged the risk of Mann backing a hike, but said her reasoning — linked to the collapse of the ceasefire and renewed energy risks — “still jars with previous arguments that she preferred to make large rather than small moves in rates”.
The bank therefore judged that markets were right to look through the headline split.
“We think the market was right to look through Ms. Mann’s arguments, which could easily change again, while other swing votes seem happy to keep waiting,” Rabobank said.
The more important signal came from the guidance.
The Monetary Policy Committee inserted a sentence saying there was “little evidence so far” of stronger second-round inflation effects and that there had “continued to be clear signs of underlying disinflation in recent data”.
Rabobank reads that as “slightly less hawkish”, even though the minutes also warned against “placing too much weight on initial evidence” because inflation spillovers can emerge with a lag.
That tension explains the muted currency reaction.
The reaction chart shows an initial rise in Sterling immediately after the announcement, consistent with traders responding to the unexpected 6–3 vote. That move did not last.
Within roughly 20 minutes, GBP/USD and GBP/AUD had fallen below their pre-release levels, while GBP/EUR settled into a modest decline. Sterling recovered unevenly during the following hour, but another sharp sell-off late in the window left all four tracked crosses lower after two hours.
The price action suggests the market quickly shifted from the vote count to the guidance. Three dissenters sounded hawkish; the Committee’s willingness to wait carried more weight.
Rabobank said the MPC’s swing voters appear “content to keep holding interest rates while they wait for signs of second-round effects”, provided markets continue pricing some chance of tighter policy later.
That patience makes a September increase look unlikely. The bank sees “little in the Committee’s communication to suggest much chance of a hike” at that meeting, despite markets assigning a probability of around 43%.
November is more plausible, but even then Rabobank is not forecasting a move.
Near-Term Pound Forecast: Hawkish Vote Fades as BoE Signals Patience
Rabobank expects Bank Rate to remain at 3.75% through the end of 2027.
Its conviction does not come from a benign inflation view. The bank agrees that “global factors pointed to an economic environment that risked being more inflationary in the future”, while the MPC judged that “the risk of strong inflationary pressures was greater than the risk of weak”.
The distinction is between risk and action.
Rabobank believes the Committee wants to wait for clearer evidence before tightening, unless another energy shock forces its hand. It therefore sees “the risk of a rate hike as much larger than for a cut”, even though its central forecast remains unchanged rates.
That is not an especially comfortable message for Sterling bulls. The vote gives the Pound some protection against aggressive rate-cut expectations, but the guidance offers little reason to price an imminent increase.
The market’s conclusion was visible within minutes: a hawkish-looking split, followed by a softer British Pound.
