The central bank says inflation in the U.K. may rise to 3 percent by summer, above its target, but it will look past higher prices to help the country's flagging economy.
Monetary policy designed to support the economy tends to weigh on a nation's interest rates. Lower rates in turn can weaken a currency, as investors often seek higher returns in other markets.
In midday trading in New York Wednesday, the pound is down to $1.5533 versus $1.5652 late Tuesday.
The dollar is up a bit against the euro, a currency used by 17 European countries, and down slightly versus the Japanese yen.