Investing.com — Sterling rose on Thursday after the Bank of England kept interest rates unchanged, with investors watching for guidance from policymakers about the impact of the Iran war.
The central bank’s Monetary Policy Committee voted unanimously to keep borrowing costs on hold, with some members noting the prospect of raising rates.
As of 13 GMT, pound rose 0.3% touching $1.33 against the dollar, while the euro edged slightly lower against the pound, with at 0.8638, down 0.01%.
ING forecasts two rate cuts by the Bank of England and maintains a bullish bias on for the coming months. The bank has set an end-Q2 target of 0.88 for the currency pair, which also incorporates political risk associated with local elections scheduled for May.
“The Bank of England’s decision to hold rates had been anticipated, and perhaps reflects a cautiously optimistic assessment of the UK growth outlook. Holding rates suggests the continuation of a more balanced approach, underscoring the view that policy is now firmly in restrictive territory, while avoiding the risk of overtightening into a weakening macroeconomic backdrop,” according to Chris Cheverall, Head of UK at CMC Markets.
