The pound jumped yesterday after the Bank of England announced it was raising interest rates for the first time in three years. Sterling has eased off slightly this morning but is still trading around strong levels.
The move comes after months of rising inflation, however, markets were unsure if the Bank would take action in its December meeting due to uncertainty around the economic impacts of the new Omicron variant.
In another big announcement, the European Central Bank showed the first signs of tapering, revealing that it would begin to wind down its Pandemic Emergency Purchase Programme (PEPP) in the first quarter of 2022 and bring it to a complete close in March. This surprised markets and pushed the euro higher.
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