Sterling eases as BoE keeps rates on hold

The value of the pound against the dollar eased today (July 8th) as the Bank of England decided to keep interest rates on hold for another month.

Sterling hit a two-month high against the US currency, but later dropped to around $1.514.

The Monetary Policy Committee's announcement that interest rates would remain at the record low of 0.5 per cent for the 16th consecutive month had little bearing on the foreign exchange markets.

However, according to Reuters, mixed economic data impacted on currency movements. A larger than anticipated rise in industrial production was offset by a drop in house prices.

The pound also fell against the euro, with concerns easing over the debt crisis among eurozone banks.

Europe's central bank also voted to keep interest rates on hold today at one per cent following a meeting of the Governing Council.

Inflation in the eurozone remains below the two per cent target.

Posted by Chris Barber

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