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Pound is moving lower after the Bank of England holds interest rates

2019-11-07 12:29 pm | Resource: News | No Views : 39

Pound is moving lower after the Bank of England holds interest rates

The Bank of England announced on Thursday that it was keeping interest rates unchanged. The Central Bank's Monetary Policy Committee voted yesterday by a 7-2 majority to keep the bank rate at 0.75%. Jonathan Haskell and Michael Saunders were the only opponents, advocating a 25bp cut. The MPC also voted unanimously to maintain the stock of corporate bond purchases of £ 10 billion and purchases of British government bonds by £ 435 billion.

"The UK's core GDP growth has slowed significantly this year," the central bank noted, reflecting risks associated with Brexit and global growth that has been under pressure from protectionist trade.

However, after a further extension of Article 50 recently, the chances of Britain leaving the EU "have not declined significantly", the Bank of England confirmed, supporting its forecast that GDP growth will rise next year. Easy UK fiscal policy and modest recovery are also expected to contribute to global growth.

Michael Saunders and Jonathan Haskell wanted to cut interest rates a quarter percentage point, in the first vote on a more flexible policy since 2016, citing risks to the outlook and signs of a shift in the labor market. If global growth fails to stabilize or uncertainty about Brexit continues, monetary policy may need to boost the expected recovery in UK GDP growth and inflation.

Pound is moving lower after the Bank of England holds interest rates

The British pound weakened against the dollar on Thursday after the Bank of England announced its intention to keep interest rates steady. The central bank statement remained unchanged on quantitative easing as well, but two MPC members voted to cut interest rates.
  • Sterling fell 0.26% against the dollar buying 1.28264.
  • The pound weakens to a two-week low of 1.2711 against the franc
  •  The pound falls to a two-day low of 0.8638 against the euro.


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