Latest News

Sterling slips after BoE hints rates near peak


Sterling hits 4-month low versus euro ahead of expected BoE, ECB hikes By Reuters

Breaking News


Forex 1 hour ago (Feb 02, 2023 10:11)

© Reuters. FILE PHOTO: UK pound coin plunges into water in this illustration picture, October 26, 2017. Picture taken October 26, 2017. REUTERS/Dado Ruvic

LONDON (Reuters) – The British pound slipped on Thursday to its lowest level against the euro since September as investors awaited the Bank of England and European Central Bank policy decisions later in the day.

The BoE is expected to raise its main interest rate by 50 basis points, its 10th consecutive rate rise, as it keeps up its fight against rampant inflation. There is an outside chance of a smaller quarter-point rate rise.

A 50-basis-point move, which is largely priced in by money markets, would take the Bank Rate to 4%, its highest since 2008.

The announcement is scheduled for 1200 GMT.

Focus will be on the vote split among policymakers after a three-way split in December when two rate-setters preferred to maintain the Bank Rate at its level then, one member favoured a larger 75-basis-point rise and six voted for a half-point hike.

“A potential downshift to 25bp is possible, which would weigh on GBP given 45bp is priced in the rates market,” HSBC (LON:HSBA) analysts said in a research note.

“Even if the BoE hikes 50bp, it is unlikely to give such a hawkish message as the ECB.”

The ECB is widely expected to raise its interest rates by 50 basis points when it announces its policy decision at 1315 GMT and is likely to signal further rate hikes at future meetings.

By 0952 GMT, the euro was up 0.4% against the pound to 89.18 pence, its strongest level against sterling since September last year.

The pound was down 0.3% against the dollar at $1.2337. It hit a seven-month high of $1.24475 last week.

On Wednesday, the Federal Reserve raised its main interest rate by 25 basis points, a downshift from the 50-basis-point hike at the last meeting. Fed Chair Jerome Powell said “a couple more” rate increases likely lay in store.

The BoE will also be updating its projections for growth and inflation, with most economists now expecting a shallower downturn than previously predicted.

“We expect the updated MPC macro projections to show upgrades to growth and likely lower near-term inflation,” UBS economists said in a note.

Sterling hits 4-month low versus euro ahead of expected BoE, ECB hikes

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2023 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Eli Lilly Dives After A ‘Bump In The Road’ Shakes Its Newest Diabetes Drug

Previous article

Hanesbrands stock plunges toward biggest selloff in 15 years after relatively high dividend eliminated, warning of a Q1 loss

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News