The Bank of England signals a rate cut, when will the pound stop falling?

**Economic Weakness Triggers Market Chain Reaction**

The UK economy has recently underperformed, becoming the main driver of pressure on the pound. In May, GDP unexpectedly contracted by 0.1%, which dampened market confidence. Since July, the pound has depreciated over 2% against the US dollar, with a further decline of 0.43% on July 14, reaching 1.3427, marking three consecutive days of decline.

**Clear Dovish Signal from the Central Bank, Rate Cut Expectations Rise**

Bank of England Governor Andrew Bailey recently revealed that if the employment market deteriorates beyond expectations, the central bank will consider more aggressive rate cuts. This statement was quickly picked up by the market, with traders increasingly optimistic about the BOE's easing stance. According to the latest forecasts, the BOE's cumulative rate cuts this year could reach 58 basis points, with an 80% probability of a 25 basis point cut in August.

**Professional Institutions Keep a Close Eye on Developments**

James Smith, an analyst at ING, believes the BOE may accelerate the pace of rate cuts to address economic challenges. US banks suggest that the central bank is expected to start adjusting its quantitative tightening strategy from October, reducing its annual government bond holdings from the current 100 billion pounds to 60 billion pounds.

**The Pound Still Faces Multiple Pressures in the Future**

Looking mid-term, several institutions remain cautious about the pound's outlook. Monex analysts point out that fiscal tightening, a weak labor market, and GDP contraction will continue to exert pressure on the pound. Brian Mangwiro, a multi-asset investment manager at Barings, is more pessimistic, predicting that the pound against the dollar could fall to around 1.30 within the next six months. Investors should closely monitor when the pound hits its bottom.