Pound drops as BoE signals spike in inflation
The pound fell against its major counterparts in Thursday’s European session as the Bank of England raised its key rate as expected but said inflation was likely to have peaked.
The Monetary Policy Committee voted 7-2 to raise the Bank Rate by 50 basis points to 4.00%, the highest since 2008.
“If there were to be evidence of more persistent pressures, further monetary policy tightening would be required,” the MPC said.
Global consumer price inflation remained elevated, although it likely peaked in many advanced economies, including the UK, the central bank noted.
In the monetary policy report, the BoE said inflation is expected to fall rapidly this year and the recession will be much shallower than expected in November.
The pound fell to 1.2279 against the greenback, from a 3-day high of 1.2401 seen at 6 p.m. ET. The pair had finished Wednesday’s trades at 1.2373. The Pound could face support around the 1.21 region, if it falls again.
The pound hit 1.1165 against the franc, its lowest level since January 6. At Wednesday’s close, the pair was worth 1.1226. The Pound is seen facing support around the 1.10 level.
The Pound depreciated to a fresh 3-week low at 157.98 against the Yen from yesterday’s close at 159.49. The next short-term support for the currency is around the 153.00 level.
The pound fell to an over 4-month low at 0.8948 against the euro from the previous close of 0.8880. The Pound is likely to find support around the 0.92 region.
For comments and feedback, contact: [email protected]
Economic news
Pound drops as BoE signals spike in inflation
