The Bank of England (BOE) held interest rates at the record low level of 0.25 percent and maintained asset purchases at £435 billion on Thursday.
The decision, which was made by an 8-1 majority, had been as good as unanimously anticipated by central bank watchers with many expecting the BOE to err on the side of caution until more clarity emerges on the Brexit process and the U.K. economy’s capacity to manage outside of the European Union (EU).
The fact that the sole dissenter, Kristin Forbes, will be leaving the Bank in June 2017 did not deter currency traders from sending sterling immediately higher to trade at around $1.234, having hovered at an average level of around 1.227 for much of the morning.
BOE governor Mark Carney has repeatedly emphasized his rate-setting board’s willingness to ignore a certain level of above-target inflation prompted by the sharp plunge in sterling of around 18 percent since the Brexit vote last June. This came amid arguments from many sides that the current strength of the economy warrants a rate hike.