HiFX: Rate cuts a welcome relief

News that the interest rate has not been slashed as much as feared will be a "welcome relief" to businesses that trade internationally, an industry expert has stated.

The comments, from currency strategist Marc Cogliatti at the foreign exchange specialist HiFX, came after the monetary policy committee (MPC) announced that rates will be cut 0.5 per cent to 1.5 per cent.

Mr Cogliatti explained that the problems of a weaker pound have affected UK firms importing goods from abroad.

It has also been a difficult time for exporters because the foreign exchange markets have been unstable.

"The immediate reaction to today's announcement has been relatively muted," he said.

"[And] with the markets still relatively illiquid and nervous, volatility looks set to remain a key feature in the months ahead."

The MPC is made up of nine members and each member has a vote to set interest rates at the level they deem appropriate. The overall decision is made on the basis of one person, one vote - not on a consensus of opinion.