Contributors Fundamental Analysis Pound Plummets 1% on BoE Decision

Pound Plummets 1% on BoE Decision

  • BOE Nov Minutes: MPC Voted 7-2 to Raise Bank Rate to 0.5%
  • BOE Nov Minutes: 2 Voted to Keep Rate Unchanged
  • BOE Nov Minutes: 7 Voted to Increase Rate
  • BOE Deputy Governors Ramsden and Cunliffe Voted To Leave Rate At 0.25%
  • BOE Rate Rise Is First Since Global Financial crisis
  • BOE Cites Lowered Economic "Speed Limit" As Reason For Rate Rise
  • BOE Sees Potential Growth Rate At 1.5%, Down From 1.75% In Aug
  • BOE Signals Two Further Rate Rises Likely By End Of 2020
  • BOE Sees Inflation Falling Close To Its 2% Target By 2020
  • BOE Forecasts Based On Assumption Bank Rate Rises To 1% By End 2020
  • BOE Cuts 2018 Growth Forecast To 1.7% From 1.8% In August
  • BOE Continues To Forecast 2019 Growth At 1.7%, Sees Same In 2020
  • BOE Dissenters Saw Little Sign Of Pickup In Wages, Domestic Cost Pressures
  • BOE: Brexit Process Having "Noticeable Impact" On U.K. Economy
  • BOE: Response Of Households, Businesses To Brexit A "Considerable Risk" To Outlook

Sterling has fallen sharply, quickly reversing initial gains after the BoE raised interest rates by +0.25 bps to +0.5%, as expected, but said future rate rises would be "at a gradual pace and to a limited extent."

The BoE also warned on Brexit uncertainty, saying it was "having a noticeable impact on the economic outlook."

GBP/USD has fallen as much as -1%, last down at £1.3124, compared with £1.3269 before the decision. EUR/GBP last up +1.23% at €0.8885, compared with around €0.8811 beforehand.

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