The Bank of England opted to maintain rates at their 16-year peak of 5.25%, despite a decline in headline inflation from 4% to 3.4%, marking its lowest level since 2021. Analysts anticipate inflation will ease towards its 2% target in the forthcoming months, yet Bank officials remain keenly attentive to wage growth. The Bank's decision was split among its members, reflecting a lingering caution against premature rate cuts.

Market forecasts suggest the initial rate reduction may materialise in August, though June remains a viable option, with a collective 0.70% reduction anticipated for the year.

In parallel, the US Federal Reserve upheld its current policy stance, with Chair Powell emphasising the necessity for sustainable inflation alignment with targets. The Fed continues to anticipate three rate decreases throughout the year.

Meanwhile, the European Central Bank signals a hold on rates until June, awaiting substantial evidence to initiate an aggressive rate reduction cycle, with approximately 1% of cuts factored in amid a dim economic outlook, particularly evident in Germany's lagging performance.

Currency markets exhibit volatility within recent ranges, devoid of clear conviction or trend. GBP/USD hovers around 1.2600, descending from its recent yearly high near 1.2900, while GBP/EUR remains positioned towards the upper boundary of its established range of 1.1500 – 1.1750.

Focus shifts to forthcoming UK growth data, accompanied by quarter-end dynamics influencing market momentum.