Sterling Update: Holding Rates Steady

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.

The Bank of England and the European Central Bank both opted to hold rates steady in their policy meetings yesterday. Although the outcome was the same as the Federal Reserve the day before, the sentiment behind the decisions was markedly different.

Whereas the Fed’s market-moving comments from Jerome Powell suggested interest rate cuts were coming “into view”, his counterparts in Europe were more cautious. Their statements seemed to imply rate cuts were not yet on the agenda, with ECB President Christine Lagarde saying, “We should absolutely not lower our guard,” and Bank of England Governor Andrew Bailey reiterating monetary policy would remain restrictive for some time yet. What was perhaps even more insightful into the Bank of England’s stance was that three of the nine policymakers voted to raise rates again.

Sterling reacted positively to the news, extending earlier gains and hitting the highest level since August. After Lagarde’s comparatively hawkish comments, the euro also posted gains against the dollar.