The Bank of England’s surprise decision to keep its powder dry and avoid raising interest rates helped propel London’s markets higher at the expense of the pound.
The Bank of England’s surprise decision to keep its powder dry and avoid raising interest rates helped propel London’s markets higher at the expense of the pound. B anking stocks led the fallers amid disappointment that low interest rates will continue for at least one more month following the Monetary Policy Committee’s 7-2 vote to keep rates at 0.1%. However, most other sectors welcomed the news gladly, pushing London’s main markets higher. The FTSE 100 closed 31.02 points, or 0.43%, higher at 7,279.91 on Thursday. The FTSE’s multinationals also benefited from the pound sliding to its lowest for a month, after the update went down badly with currency traders who had priced in a rise. Joshua Mahoney, senior market analyst at IG, said: “The pound has been hit hard today, after the Bank of England opted against the hotly anticipated first rate hike since 2017. “While market expectations for a hike had come in from the lofty 82% seen almost three-weeks ago, the fact that markets had been pricing in a 62% chance of a rate rise today has resulted in a sharp move lower for the pound.
