Sterling falls amid rate cut speculation

GBP

The pound suffered towards the end of the week after a second policy maker joined Bank of England Governor Mark Carney in signalling a potential interest rate cut. Policymaker Tenreyro said she would be behind an interest rate cut if growth in the UK does not pick up in the coming months, fuelling speculation that the Bank of England may be considering additional stimulus to the economy.

This, in tandem with the uncertainty around the future trade relationship with the EU, means that the pound is being kept lower for the time being. British lawmakers approved legislation on Thursday that will allow Britain to leave the European Union on 31st January with an exit deal, however this was expected given the Conservative landslide victory in December.

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