The
sterling retreated on Thursday after the Bank of England (BOE) decided to keep
its monetary policy unchanged, with a sign of focus on the next phase of Brexit
negotiations.
As
of 13:30 GMT, the British resumed
its plunge for a fourth consecutive session versus the dollar, trading at its lowest
level in nearly two weeks at 1.3031.
Not only against the U.S dollar, but also against
the euro, as the pound slipped to 0.8525, compared to the session’s open at
0.8494.
The
Bank's monetary policy statement revealed that the policymakers have decided to
hold the UK benchmark interest rate at 0.75 percent.
This
decision was in line with analysts' broad expectations, but the vote showed
that two MPC members dissented from the majority, sticking to their position on
cutting the borrowing cost.
Jonathan
Haskel and Michael Saunders resumed their call for rates to be slashed to 0.5
percent, the meeting minutes showed.
The
Bank of England has also decided to maintain the current pace of government and
corporate bond buying at £435 billion and £10 billion respectively.
Monetary
policymakers said it was too early to tell whether the path was clearer with
regard to the UK leaving the EU because Boris Johnson's election victory would
improve morale.
They
stressed that monetary policy might need to add incentives if uncertainty about
Brexit remained or global growth failed to accelerate.
On the other hand, GDP for the UK economy recorded a
quarterly growth of 0.3% during the third quarter of this year, with increased probability
of rising during the fourth quarter of 2019.
This occurs at a time when British exports remained in
a vulnerable state while household consumption maintained its high level.
“The partial de-escalation of the US-China trade war
provides some additional support to the outlook relative to the November
Report, although trade tensions remain elevated,” the bank statement added.
But the bank stressed
that it was too early to judge how things would develop in 2020 and how it will
impact the economy’s outlook.
