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Pound Drops After BOE Rate Hike
(RTTNews) - The pound declined against its major counterparts in the European session on Thursday, after the Bank of England lifted its key rate by a quarter point, as expected.
Six member of the Monetary Policy Committee including Governor Andrew Bailey voted to lift the bank rate by 25 basis points to 5.25 percent.
Jonathan Haskel and Catherine Mann preferred to raise the rate by 50 basis points, while Swati Dhingra voted to hold the rate at 5.00 percent.
"If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required," the bank said.
The bank expects inflation to fall significantly to around 5.0 percent by the end of the year. However, services price inflation is projected to remain elevated at close to its current rate in the near term.
The pound depreciated to near a 5-week low of 1.2620 against the greenback and more than a 3-month low of 1.1050 against the franc, from yesterday's closing quotes of 1.2710 and 1.1154, respectively. The next possible support for the currency is seen around 1.24 against the greenback and 1.09 against the franc.
The pound weakened to a 6-day low of 180.40 against the yen and a 10-day low of 0.8655 against the euro, from yesterday's closing values of 182.07 and 0.8604, respectively. The currency may locate support around 176.00 against the yen and 0.88 against the euro.
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