Pound strengthens following interest rate hold

DESPITE an eagerly anticipated cut in interest, the Bank of England yesterday decided to maintain rates at 0.5%, prompting a surge in the value of the pound.

The Monetary Policy Committee voted 8 to 1 on the bank rate in a surprise move.

Just hours after the announcement the pound surged 1.76% against the US dollar, making it the best performing week since 2009. It jumped 1.35% against the euro, to €1.2014.

However it is still valued at below pre-referendum levels.

The Bank of England yesterday said: “Official data on economic activity covering the period since the referendum are not yet available.

“However, there are preliminary signs that the result has affected sentiment among households and companies, with sharp falls in some measures of business and consumer confidence.”

Governor Mark Carney led the majority in voting for maintaining rates, whilst newcomer and former hedge fund economist Gertjan Vlieghe pushed for a cut.

Philip Hammond was named Chancellor just hours before the announcement.

Interest rates since 1975