It was announced yesterday that the Bank of England voted to raise the UK’s interest rate to 0.5%, which was widely expected and caused the pound to strengthen initially. However, comments from Governor Andrew Bailey and from President of the European Central Bank subsequently caused sterling to weaken against the euro.
Following ‘hawkish’ headlines following the Bank of England’s meeting, Bailey followed up with cautious comments about an “uncertain” economic outlook, which was more ‘dovish’ than the markets had expected.
In contrast to this, European Central Bank President, Christine Lagarde, refused to rule out an interest rate hike this year, which boosted the euro.
It was a turbulent day in Downing Street yesterday, with four of Boris Johnson’s senior aides resigning amid questions over the Prime Minister’s leadership.
Today, all eyes are on US non-farm payrolls, which will reveal how many jobs the US economy added in January.
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