GBP – Sterling dropped on Thursday after the Bank of England’s November meeting. The BoE said borrowing costs were likely to go up less than markets expect and warned that the economy was heading for a protracted recession even as it raised rates by the most in three decades.
Summarising the meeting, Reuters noted:
“The BoE raised Bank rate by 75 basis points (bps) in an effort to tame double digit inflation, taking it to a 14 year high of 3%. It was the biggest rate hike since 1989, apart from a failed attempt to boost sterling on Black Wednesday in 1992.
In a highly gloomy message, the BoE said Britain which is grappling with a sharp rise in energy and mortgage costs has probably tipped into a recession. It said the downturn could cause the economy to shrink in both 2023 and 2024.
Analysts said sterling was reacting to the much less aggressive tone of the BoE compared to the Fed, as well as the dire economic outlook.”
Summarising the meeting, Reuters noted:
“The BoE raised Bank rate by 75 basis points (bps) in an effort to tame double digit inflation, taking it to a 14 year high of 3%. It was the biggest rate hike since 1989, apart from a failed attempt to boost sterling on Black Wednesday in 1992.
In a highly gloomy message, the BoE said Britain which is grappling with a sharp rise in energy and mortgage costs has probably tipped into a recession. It said the downturn could cause the economy to shrink in both 2023 and 2024.
Analysts said sterling was reacting to the much less aggressive tone of the BoE compared to the Fed, as well as the dire economic outlook.”
