The value of the pound fell sharply as the Bank of England hinted there would be more interest rate cuts this year.
Sterling fell 1.1% during trading to $1.237 after interest rates were cut yesterday to 4.5%, but it later recovered slightly to around 0.6% down at the close of trading, at $1.244.
The Monetary Policy Committee (MPC) voted 7-2 to cut rates as it slashed its growth forecast for 2025 in half.
The governor of the Bank of England, Andrew Bailey, insisted there would be a “gradual and careful approach to reducing rates further”.
Bank staff now believe the economy will expand by just 0.75% this year, down from a projection of 1.5% just three months ago.
The latest economic forecasts warned of a stagnating economy, higher inflation and rising unemployment against the backdrop of a £40billion tax raid.
FTSE 100
The UK's flagship share index, the FTSE 100, was up 1-points at 8,710 shortly after opening this morning.
Brent crude oil futures were up 0.59%, trading at $74.70 a barrel.
Companies reporting today
07-Feb | |
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Ashmore Group | Half Year Results |