Sterling under pressure

Sterling exchange rates have remained under pressure today following the latest Bank of England interest rate meeting.

As very much expected the central bank held its base rate on hold at 0.75% but it was the post decision press release which has caused the pound to fall. At the time of writing GBP/EUR has fallen from 1.11 to 1.1060 and GBP/USD from 1.27 to 1.2665.

In the post decision press conference Bank of England Governor Mark Carney downgraded cut its forecast for UK growth and warned that a lack of Brexit clarity is weighing on the economy.

Uncertainty over the UK’s departure from the EU had “intensified considerably” over the past month, the Bank said as it announced it was not changing interest rates. It said the economy was likely to grow by 0.2% in the final quarter of 2018, from previous expectations of 0.3%.

This does not bode well for the pound. Over the Christmas period it is expected that the pound is likely to remain relatively stable, however I would expect some significant market volatility as we head towards the important parliamentary vote on the 21st January.

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