Pound Sterling Slumps against Euro, Dollar in Wake of Timid 25bp Bank of England Hike
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The Bank of England walked a steady line by announcing a 25 basis point interest rate rise on June 16, a move that disappointed some in the market looking for a more forceful 50bp hike.
The British Pound fell against the Euro and Dollar as the news broke and it was revealed the Monetary Policy Committee voted 6-3 for a 25 basis point hike.
The Pound to Euro exchange rate was down nearly half a percent in the wake of the decision to quote at 1.1589, the Pound to Dollar exchange rate was down 0.80% at 1.2086. Ahead of the event Pound Sterling Live reported a hike of at least 50 bp was required for Sterling to just stand still.
But the contents of the Bank’s statement revealed it is not yet ready to quit the hiking cycle, warning it was prepared to act more forcefully in the future if inflation was deemed to be more persistent.
This promise could protect the UK currency against a messier sell-off.
“The Committee…
