British Pound Declined After BoE Rate Decision

Market Reviews

The British pound fell sharply after the decision of the Bank of England to raise the benchmark interest rate by 25 bps up to 0.50%, for the first time in a decade. The pound's fall was caused by the fact that the markets perceived the rate hike as a one-off step. The asset purchase target was held unchanged at GBP 435b. Forecasts for growth and inflation remain largely unchanged. According to forecasts, inflation in the next three years will be 2.2%.

Initial unemployment claims in the US fell by 5 thousand to 229 thousand for the week ending October 28. This is below market expectations of 235 thousand. Continuing claims decreased by 15 thousand to 1.88 million, the lowest level since 1973.

The UK PMI construction increased to 50.8 in October. Eurozone PMI manufacturing was completed at 58.5. The unemployment rate in Germany remained unchanged at 5.6%.