The pound has slumped against both the euro and the dollar following the Bank of England’s decision to raise interest rates from 0.75% to 1%, the highest rate since 2009.
Sterling suffered following the announcement, falling over 1% against the euro and over 2% against the dollar, as markets reacted to the lower-than-expected hike. The pound was previously trading artificially high due to speculation of a 0.5% hike, so the 0.25% hike came as a disappointment.
Interest rates are hiked to tackle inflation, which policymakers from the BoE warn could rise above 10% in the coming months.
