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Weekly Roundup: Unexpected split among BoE policymakers fuels pound sell-off

currency-newsWeekly Roundup: Unexpected split among BoE policymakers fuels pound sell-off
GBP exchange rates fell as two Bank of England (BoE) policymakers voted in favour of an immediate interest rate cut at the central bank’s latest gathering. 

The odds of a 2020 interest rate cut jumped in the wake of Thursday’s policy announcement, with the BoE appearing more dovish than investors anticipated.

As markets moved to price in a higher likelihood of interest rates being cut in the near future the mood towards the pound naturally soured.

However, GBP exchange rates were able to recover some of their lost ground on the back of the third quarter UK gross domestic product data.

Although economic activity remained muted compared to the UK’s long term trend investors were still relieved to find that growth had picked up 0.3% on the quarter, avoiding a technical recession.

Even so, further weakness may be in store for the Pound if Wednesday’s consumer price index eases as forecast.

If the headline inflation rate falls further away from the BoE’s 2% target this would give policymakers further incentive to cut interest rates, leaving GBP exchange rates exposed to additional selling pressure.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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