By Justin Pei
Rochester — With the United Kingdom set to formally withdraw from the European Union on 31 January 2020 at 11 p.m. GMT, the British pound has continued to rise in value. The GBP was up 0.4% against the Euro to €1.1912 and 0.3% against the dollar to a one-week high of around $1.3136, just hours before the U.K. is set to formally leave the European Union.
Analysts believe this has less to do with Brexit itself, but more to do with the Bank of England holding its interest rates steady at the benchmark 0.75%, startling investors who expected the interest rate to drop.
The bank’s nine-member monetary policy committee (MPC), voted to leave the interest rate unchanged. The MPC based this decision on the perception that uncertainties around Brexit and global trade wars have currently cooled.
This lack of an interest rate cut consequently set the pound rising . on Thursday afternoon, a trend that has continued into Friday morning.
Sterling’s momentum came despite the Bank of England cutting growth forecasts to the lowest levels seen since World War II. The U.K.’s central bank expects the U.K. economy to grow by just .8% in 2020. It had previously predicted a growth of 1.2%.
