Pound rose on the Bank of England’s decision to keep the rate

14.07.2016

On Thursday, the pound jumped to peak levels from late June against the US dollar after the Bank of England kept unchanged monetary policy, confounding expectations for a rate cut, but made it clear that it intends to ease monetary policy at its next meeting in August.

GBP/USD initially jumped to 1.3463, the highest since June 30 and then consolidated at 1.3357, up 1.62% for the day.

The Monetary Policy Committee of the Bank of England voted eight to one for having to leave the interest rate unchanged at 0.5% and the quantitative easing program at a level of £ 375 billion.

Most managers expect the British Central Bank easing monetary policy in August, according to the minutes of the meeting.

"The exact size and nature of the stimulus will be determined in the August forecast and the inflation report."

Today's meeting minutes also showed that the referendum on the exit from the EU, which took place last month, has put pressure on the economy and, in particular, the housing market in the UK.

There is expected a serious decline in commercial real estate prices, said the report.

The report, released earlier on Thursday, showed that the mood among British property buyers fell to lows since mid-2008, confirming the fact that Brexit harms the economy.

The pound sterling rose before the announcement of the bank, after the new British Prime Minister Theresa May has appointed Philip Hammond as the new finance minister, succeeding George Osborne.

Speaking on Thursday, the newly appointed Minister said that the UK economy is "in shock" after Brexit, as companies and consumers were not ready for such an outcome of the vote, but added that he would do everything necessary to restore confidence in the economy.

He also announced that he would adhere to the less aggressive approach to solve budget problems, noting the disagreement with the policy of its predecessor.

The pound was also higher against the euro - EUR/GBP pair fell 1.11% to 0.8349.

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