UK Currency Plummets as Central Bank Governor Hints at Aggressive Rate Cuts
The British pound suffered a significant decline against the US dollar on Thursday, shedding over 1% of its value, following a report that the Governor of the Bank of England, Andrew Bailey, suggested the central bank may adopt a more aggressive approach to interest rate cuts if inflation data continues to improve.
As of 9:45 am in London, the pound had fallen to $1.3119, down 1.12% from its previous level. This decline comes as a surprise, given the UK currency’s recent boost following the Bank of England’s September meeting, where policymakers took a more hawkish stance compared to their US counterparts.
In an interview with The Guardian, Bailey indicated that the Bank of England could become more proactive in cutting interest rates if inflation trends continue to be favorable. He also expressed optimism that cost of living pressures have not been as persistent as initially thought.
The Bank of England has held its key interest rate steady at 5% since September, following a 25-basis-point cut in August. During the September meeting, the institution expressed concerns about services inflation and the labor market, despite headline inflation hovering near its 2% target.
This development has significant implications for the UK economy and global markets. Stay tuned for further updates as this story continues to unfold.
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