Pound Drops After BoE Releases Minutes of Monetary Policy Meeting

  May 23rd, 2012 at 10:06, Vladimir Vyun

UK coins on banknotesThe Great Britain pound dropped today, reaching the lowest level in a month against the US dollar and the lowest in two months versus the Japanese yen, after the minutes of the central bank’s monetary policy meeting were released.

The minutes showed that the policy makers of the Bank of England were considering additional stimulus. They cited risks associated with the European crisis as threats to the economy. Additionally, uncertain prospects for economic growth were also considered a danger:

Output remained significantly below its pre-crisis trend and persistently weak growth might impair the future supply capacity of the economy through hysteretic effects: that risk could be attenuated by a more aggressive loosening of policy in the near term.

Most members of the Monetary Policy Committee though that the current level of interest rates and asset purchases is enough to support the economy for now, but one member of the Committee voted for expanding the size of the asset purchase program by a further £25 billion to a total of £350 billion.

GBP/USD was down from 1.5767 to 1.5722 as of 10:06 GMT today, while earlier it reached 1.5674 — the lowest price since March 15. GBP/JPY dropped from 125.98 to 124.85 and its daily minimum of 124.46 was the lowest since February 16.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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