The Great Britain pound climbed today after the Bank of England surprised markets, leaving its monetary policy unchanged.
The BoE preferred to keep its main interest rate unchanged at 0.5% with just one person voting for a cut. It was a huge surprise to market participants as they were counting on policy easing.
The central bank signaled that it is likely to ease the policy in August:
The MPC is committed to taking whatever action is needed to support growth and to return inflation to the target over an appropriate horizon. To that end, most members of the Committee expect monetary policy to be loosened in August.
The sterling’s gains are likely just a knee-jerk reaction to the BoE surprise decision and do not mean a change of the trend for the currency.
GBP/USD rallied 1.5% from 1.3144 to 1.3339 as of 20:22 GMT today. GBP/JPY jumped 2.4% from 137.30 to 140.62. EUR/GBP dropped 1.2% from 0.8434 to 0.8334.
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