The strength of the pound has dropped sharply after the Bank of England held interest rates at 0.5% and kept its quantitative easing programme (QE) unchanged. The pound has now hit a three-month low against the dollar, and analysts suggest it could weaken further.The decisions were made at the first meeting of the Bank’s Monetary Policy Committee, which prompted the markets to be warned by the bank not to assume that they would start raising rates soon. Harry Adams, managing director of foreign exchange forecaster Argentex, called the decision “significant” as “This statement suggests that further quantitative easing is likely and interest rates will remain low for the foreseeable future,”
he said. He added that “A three year low at 1.4230 could well be reached over the next couple of months.”
News this afternoon that US employment grew by 195,000 in June gave the dollar another boost against the pound and sent the pound down even further.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with debt recovery solicitors in Central London and across the country.