The pound reached its highest levels against the euro in a year yesterday morning, but soon lost some of its strength as the Bank of England announced its interest rate decision. This morning, sterling has strengthened slightly against the dollar following the pattern of US bond yields.
The BoE voted to keep interest rates as they are, at 0.1%. This disappointed markets who had been hoping for the Bank to indicate when they might raise interest rates. The Bank did, however, say that there were signs of economic recovery and restrictions could potentially be lifted “somewhat more rapidly” than previously thought in February.
There have been some concerns over a reduction in the supply of vaccines to the UK. Health Secretary Matt Hancock reassured the public that this delay will not affect the progress of the roadmap out of lockdown, and that the government is still “on track” to have offered a vaccine to all adults in the UK by the end of July. However, this delay could weaken sterling.
Consumer confidence figures rose to the highest level since last March as optimism for economic recovery continues.
