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British Pound Falls again on interest-rate Increase

Currency futures hit by another swing in the markets!

The British pound remained lower after the Bank of England raised interest rates but at a slower pace than in November.

Tweet on GBP fall amid rate increase

Tullet Prebon chart on GBP

The BOE said it would increase its policy rate by half a percentage point to 3.5%, matching investors’ expectations. It had lifted rates by 0.75 percentage point in November. The BOE joins other central banks including the Federal Reserve and Swiss National Bank in easing up on the pace of policy tightening amid signs that inflation has peaked.

The pound fell 0.8% to $1.2332. It had been off 0.7% before the decision. U.K. government bonds were the best performers among European peers.

The yield on the 10-year U.K. government bond was at 3.224%, down 11 basis points from Wednesday’s level. Yields fall as prices rise.