BLBG:Pound Extends Decline Against Dollar, Euro as BOE Votes 7-2 to Hold Rates
The pound extended its decline against the dollar and the euro after minutes of the Bank of England’s last meeting showed policy makers voted 7-2 to keep interest rates on hold.
The British currency fell to the weakest in almost two weeks against the euro after some policy makers said more asset purchases may be needed.
The pound was 0.5 percent weaker at $1.6162 and 89.13 pence per euro as of 9:34 a.m. in London.
Chief Economist Spencer Dale and Martin Weale continued a push for a quarter-point increase in the benchmark rate. Governor Mervyn King and the other six members of the Monetary Policy Committee, including Ben Broadbent, voted for no change. Adam Posen kept up a call for more bond purchases.
The majority said the “current weakness of demand growth was likely to persist for longer than previously thought,” according to minutes of the June 8-9 meeting published today in London. “Moreover, the fiscal challenges in the euro-area periphery highlighted the potential for further adverse shocks to demand. For some of these members, it was possible that further asset purchases might become warranted if the downside risks to medium-term inflation materialized.”
To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
