Sterling Drops To Yearly Lows

Sterling dropped to a 1 year low against USD in response to fresh Covid restrictions and fading chances of a Bank of England interest rate hike in December.

An increasing amounts of analysts are now looking more realistically towards February as the next likely time the Bank of England could hike rates, considering there was a predicted 80% chance of a November rate hikes at certain points, this news is putting heavy downward pressure on the Sterling.

Hawkish BoE member Michael Saunders also recently poured cold water over an imminent rate rise, saying the Bank should adopt a wait and see approach in response to concerns around the new omicron variant. Boris Johnson also yesterday announced his government will move to Plan B – with employees being encouraged to work from home, vaccine passports being brought in at certain venues and increased mask wearing in public spaces.

Boris Johnson and his Conservative government are also coming under increased pressure around alleged Christmas parties held in parliament and the Prime Ministers own Downing Street flat while the rest of the country was in lockdown. Further evidence will certainly lead to more calls for resignations within the party and put further uncertainty against Sterling. The SNP yesterday called for the Prime Minister himself to resign.