The pound received a boost against both the euro and the dollar following the Bank of England’s decision to raise interest rates yesterday, but this has eased off a little this morning.
The BoE has raised interest rates for the first time in three years to try and tackle rising inflation. Interest rates have risen to 0.25%, up from the historic low of 0.1%. This came as a surprise to markets who were in two minds over whether the Bank would take action in light of the new coronavirus variant.
Minutes released from yesterday’s meeting reveal that the Bank expects inflation to “remain around 5% through the majority of the winter period, and to peak at around 6% in April 2022”.
In other data news, retail sales increased by 1.4% in November, helped by Black Friday and early Christmas shopping.
