Pound Off Lows As BoE Holds Rate Unchanged In Split Vote

The pound trimmed its early losses against its key counterparts in European deals on Thursday, as the monetary policy committee of the Bank of England voted 8-1 to hold interest rate at 0.50 percent.

The rate has been at the current level since early 2009.

The MPC voted unanimously to maintain quantitative easing at GBP 375 billion.

Ian McCafferty again sought a quarter point hike in rates as he viewed that the risks to domestic cost growth remained to the upside, and given the recent depreciation of sterling, were less likely to be offset by the drag from earlier sterling appreciation.

The actual path that interest rate will follow over the next few years will depend on the economic circumstances, the bank said in its monetary policy summary.

The pound that was slightly higher against most major rivals in the previous session slipped during early European deals.

Subsequent to the BoE decision, the pound reversed from its early 1-year low of 0.7607 against the euro and more than a 2-year low of 168.83 against the yen, recovering to 0.7556 and 169.90, respectively. The next possible resistance for the pound is seen around 0.74 against the euro and 172.00 against the yen.

Bouncing off from its prior 2-day lows of 1.4360 against the greenback and 1.4392 against the franc, the pound ticked up to 1.4437 and 1.4489, respectively. If the pound extends gain, it may locate resistance around 1.46 against both the greenback and the franc.