The pound slid the most in nine months versus the euro as the Bank of England kept interest rates at a record low while the European Central Bank gave no indication it will introduce further stimulus.
The U.K. currency weakened against all its 16 major counterparts even as Chancellor of the Exchequer George Osborne raised the nation’s growth forecast in his Autumn Statement for the first time since 2010. U.K. government bonds outperformed German bunds on the outlook for diverging monetary policy and as Osborne said borrowing requirements will fall in coming years.
“The BOE was no surprise but the minutes will be interesting,” said Neil Jones, head of European hedge-fund sales at Mizuho Bank Ltd. in London. “That’s where the continuing shift to a more hawkish stance will occur. As for the Autumn Statement, it is full of good news, but largely expected in the market.”
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