BLBG: Pound Remains Higher Versus Euro as BOE Keeps Key Rate Unchanged at 0.5%
The pound stayed higher against the euro after the Bank of England kept its benchmark interest rate at a record low as it seeks to nurse the U.K. economic recovery.
Sterling slipped from near a two-week high against the dollar. The decision to keep the main rate at 0.5 percent was anticipated by all 57 economists surveyed by Bloomberg News. The British currency fell yesterday after a report showed U.K. industrial production unexpectedly declined in February. Gilts declined, leaving the 10-year yield within two basis points of the highest since Feb. 21.
“I would imagine they will increase in May or June,” Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London, said before the decision. “There should be more of a shift in the monetary policy committee by then.”
The pound gained 0.2 percent to 87.58 pence per euro as of 12:11 p.m. in London. It was 0.2 percent weaker versus the dollar at $1.6302 after climbing to $1.6364 yesterday, the most since March 23.
Sterling declined 0.1 percent against the euro and the 10- year gilt yield fell seven basis points after the central bank’s last meeting on March 10, when it kept rates on hold and maintained its asset-purchase program at 200 billion pounds.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net.
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.
