Pound Gains After Bank of England Holds Rates Steady

30 January 2020, 17: 38

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The pound rose after the Bank of England refrained from cutting interest rates.

 

Sterling climbed as much as 0.5% after policy makers kept the rate at 0.75%. Policy makers voted 7-2 to keep the benchmark at 0.75%, an unchanged split that belied investor expectations the decision was on a knife-edge.

 

Money markets are now pricing a 100% chance of a cut in late 2020. Gilts erased their advance, with the yield on 10-year bonds little changed at 0.51%.

Read More: BOE Holds Rates in Carney’s Swansong as Britain Exits EU

Money markets pricing for the decision whipsawed in the run up to the Mark Carney’s final policy announcement as governor, rising above 70% this month. It was too close to call earlier Thursday.

Analysts see the pound reaching $1.35 by the end of the year, according to Bloomberg’s currency survey. It traded 0.3% higher to $1.3065 as of 12:11 p.m. in London.