Extraordinary reassuring statement from the Bank of England due to concerns about sterling

London, Thanasis Gavos

The unusual move to issue a statement was made by Bank of England amid concerns over the course of sterling, which has retreated to a 37-year low against the dollar after the mini-budget presented on Friday by the new government of Liz Truss.

The statement of the commander of the central Andrew Bailey states that the relevant monetary policy committee “will not hesitate to change interest rates as necessary to return inflation to the 2% target in a sustainable manner over the medium term, in line with its mandate”.

Mr Bailey notes, however, that a decision on the level of the key lending rate depending on the impact of government measures and the fall in sterling on demand and inflation will be made at the next scheduled monetary committee meeting.

Some analysts believed that the Bank of England would possibly make an extraordinary increase in its interest rate today, which just last week it increased by 50 basis points to 2.25%.

The refutation of those expectations immediately sent sterling further down, which had recovered from a morning all-time low of 1.03 against the dollar to 1.09 in the afternoon.

Shortly before the Bank of England’s statement, moreover, the Ministry of Finance had announced that Minister Kwasi Kwarteng would present a “medium-term fiscal plan” on November 23, which would develop the fiscal rules by which government policy would be implemented. .

Asked earlier about the markets’ nervous reaction to the massive tax cut package he announced, Mr Kwarteng had chosen not to comment.

Both positions, according to economic analysts in Britain, testify to the concern that has been caused by the reaction of the markets and the fall of sterling, but they also represent an effort to make sure that there is an adequate fiscal plan.

Read the News today and get the latest news.
Follow Skai.gr on Google News and be the first to know all the news.