Pound Plummets 1% on BoE Decision

  • BOE Nov Minutes: MPC Voted 7-2 to Raise Bank Rate to 0.5%
  • BOE Nov Minutes: 2 Voted to Keep Rate Unchanged
  • BOE Nov Minutes: 7 Voted to Increase Rate
  • BOE Deputy Governors Ramsden and Cunliffe Voted To Leave Rate At 0.25%
  • BOE Rate Rise Is First Since Global Financial crisis
  • BOE Cites Lowered Economic “Speed Limit” As Reason For Rate Rise
  • BOE Sees Potential Growth Rate At 1.5%, Down From 1.75% In Aug
  • BOE Signals Two Further Rate Rises Likely By End Of 2020
  • BOE Sees Inflation Falling Close To Its 2% Target By 2020
  • BOE Forecasts Based On Assumption Bank Rate Rises To 1% By End 2020
  • BOE Cuts 2018 Growth Forecast To 1.7% From 1.8% In August
  • BOE Continues To Forecast 2019 Growth At 1.7%, Sees Same In 2020
  • BOE Dissenters Saw Little Sign Of Pickup In Wages, Domestic Cost Pressures
  • BOE: Brexit Process Having “Noticeable Impact” On U.K. Economy
  • BOE: Response Of Households, Businesses To Brexit A “Considerable Risk” To Outlook
  • Sterling has fallen sharply, quickly reversing initial gains after the BoE raised interest rates by +0.25 bps to +0.5%, as expected, but said future rate rises would be “at a gradual pace and to a limited extent.”

    The BoE also warned on Brexit uncertainty, saying it was “having a noticeable impact on the economic outlook.”

    GBP/USD has fallen as much as -1%, last down at £1.3124, compared with £1.3269 before the decision. EUR/GBP last up +1.23% at €0.8885, compared with around €0.8811 beforehand.

    This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell