Pound News & Analysis
2 articles
Market Mood
Bank of England Holds Interest Rate Steady at 3.75% Amid Inflation Risks
The Bank of England has kept its key interest rate unchanged at 3.75%, as expected by economists, with a 6-3 vote from the Monetary Policy Committee. Dissenting members highlighted concerns over inflation risks, citing factors such as energy prices and supply issues. June's U.K. inflation rate was reported at 2.6%, a 15-month low, yet the potential for future rate hikes remains if inflation does not decrease. This decision signals the central bank's cautious approach amid ongoing uncertainties in the economy, which may affect future monetary policy discussions.
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UK Government Borrowing Costs Reach 18-Year High Amid Leadership Unrest
UK government borrowing costs hit an 18-year high, with the 10-year bond yield exceeding 5.14%, the highest since 2008. The pound dropped 0.3% against the dollar to around $1.337, reflecting market concerns over potential increased borrowing under a possible Andy Burnham-led government. Additionally, 30-year gilt yields rose to 5.82%, marking a new 28-year high. This volatility is attributed to ongoing political uncertainty and fears surrounding higher public borrowing.
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