An article by Edmund Conway of the Telegraph (www.telegraph.co.uk) today reports the pound has broken through the $2 mark for the first time since January, after the Bank of England voted to leave interest rates unchanged at 5.25 percent yesterday.
It is the highest the pound has been since New Year’s Eve, but while it is good news for the British consumers now streaming over to the US for shopping trips, it will cause further concern among British manufacturers.
Experts said all eyes would be on the Bank’s minutes, released in a fortnight’s time. They will indicate how soon it will be before the Bank cuts borrowing rates again.
The Bank of England board meets the first Thursday of every month, sets interest rates to keep inflation low, issues bank notes and works to maintain a stable financial system. (www.bankofengland.co.uk)
Since the Bank’s Inflation Report last month, in which it hinted at further reductions in borrowing costs, the prospects for UK economic growth have remained more or less unchanged.
Futures markets indicate a 45 percent chance of a rate cut at the meeting on April 10.
British Retail Consortium director general Stephen Robertson said: "The Bank needs to take action sooner rather than later to ensure that the slowdown doesn’t risk turning into something more serious."