The Pound Sterling recovered against the US Dollar earlier today as investors’ expectations of a Bank of England rate cut fade. Mark Carney, the Governor of the BoE, said that the BOE’s Monetary Policy Committee could not ignore the “fairly substantial” depreciation of the Pound since June 23rd when Britons voted to withdraw from the European Union. He said that the near 18% slide since then, and its impact on UK inflation, needed to be considered when the interest rate issue comes up at next week’s policy meeting.
As reported at 10:44 am (BST) in London, the GBP/USD was trading at $1.2208, up 0.18%; the pair earlier hit a session peak of $1.2226, while the daily low was established at $1.2152. The EUR/GBP stood at 0.8944 Pence, up 0.10% while the daily range was at 0.8927 Pence at the bottom and 0.8964 at the top end.
Data Forces BoE Reconsideration
Just last month, the BoE issued a statement that said that another 2016 rate cut was likely if it seemed a slowdown in the UK’s economic growth would warrant it. However, unexpectedly upbeat data has caused the MPC to reconsider their initial stance. Earlier today, the British Bankers Association reported that mortgage approvals were up in September at 38.252K against expectations of a slight improvement to 37.300K. Tomorrow, preliminary UK growth figures will be reported for the third quarter.