Today is Super Thursday at the Bank of England. The Monetary Policy Committee announced its decision at midday, holding the base rate at 3.75% for the fifth consecutive meeting. Alongside the rate announcement came a new Monetary Policy Report and a Governor's press conference, making this one of the most significant days in the UK policy calendar. For businesses with international payments, it is worth taking a moment to understand what a prolonged rate pause actually means for your currency costs, and what you should be doing about it.
A rate hold sounds like inaction, but Super Thursday is anything but quiet. The Monetary Policy Report sets out the MPC's updated forecasts for growth, inflation and employment. Governor Bailey's press conference establishes the tone for where rates might go next. Markets spend the hours that follow repricing their expectations, and currencies move accordingly.
The hold itself was widely anticipated. What traders and businesses were watching for was the vote split, the language used around services inflation, and any signals on whether the next move is more likely to be a cut or a hike. Both outcomes are genuinely possible from here, and that ambiguity matters enormously to anyone managing international currency exposure.
At the June meeting, the MPC voted seven to two to hold, with Megan Greene and Huw Pill preferring an immediate quarter-point rise to four per cent. A split vote in the same direction today would confirm that rate cuts are not the next chapter in this story. The UK is not in an easing cycle. Services inflation, which came in at 3.7% in May, remains well above where the MPC needs to see it before loosening policy.
This is a meaningful distinction for businesses. When the Bank of England was cutting rates in 2024 and 2025, a weakening pound was a real and present risk for anyone with large import bills or euro-denominated payment obligations. Today's environment is different: the hawkish minority and sticky services inflation are keeping sterling broadly firm. But that firmness has a ceiling, and it depends almost entirely on how the inflation data develops over the coming months.
Services inflation at 3.7% is the single biggest barrier to rate cuts. If it falls sharply over the summer, the entire rate outlook can flip within a meeting or two, and sterling often moves before the decision is even announced.
A supported pound is not a predictable pound. The Federal Reserve also made its own rate decision this week, meaning two of the world's most closely watched central banks announced within 24 hours of each other. That kind of event compression creates volatile conditions even when both decisions land broadly as expected. Rate expectations can shift sharply on a single data print, a hawkish phrase in a press conference, or a change in the vote count by even one member.
For UK businesses paying overseas suppliers, receiving foreign currency revenue, or completing international property purchases, it is tempting to treat a period of apparent currency stability as a reason to put off hedging decisions. That logic is understandable, but it rarely serves businesses well. The periods of calm are frequently followed by sharp moves when sentiment shifts, and by then the opportunity to lock in a favourable rate has already passed.
The current environment, with sterling at or near multi-month highs against several major currencies and a rate outlook that is genuinely uncertain in both directions, is precisely the kind of moment a forward contract was designed for. If you have significant payments due over the next three to twelve months, locking in today's rate removes the uncertainty entirely. You know what you will pay. Your margins are protected regardless of what the MPC decides in September, or what services inflation does in August.
If your business has exposure across multiple currencies, this is also a good moment to review where the risks actually sit. Businesses often focus on their largest single payment and overlook a pattern of smaller recurring payments that, in aggregate, carry significant risk. A named FX specialist can help you map that exposure and put a structure around it, without any obligation to proceed.
The Bank of England has held again. The next move is uncertain. That uncertainty cuts in both directions, which is exactly why this is not a moment for passivity. Speak to our team and find out what protecting your margins actually looks like in practice.
When rates could move in either direction at any meeting, the best time to review your currency exposure is now. Our specialists work with businesses of all sizes to build practical hedging structures around your real payment flows.