The Bank of England expectedly ended its most aggressive cycle of interest rate hikes amid falling inflation and growing fears of a recession, keeping its key rate at 5.25%.
The pound fell to its lowest level since March as traders reduced their bets on further interest rate hikes.
However, the BOE signaled that its policy was only on pause and that it would respond if inflation, which remains more than three times above the 2% target, does not fall as expected.
GDP growth in the second half of 2023 is likely to be weaker than the 0.25% expected in August.