The Latest: Pound dips after Bank of England holds rates

LONDON — The Latest on the Bank of England’s interest rate decision and new economic forecasts (all times local):

12:40 p.m.

The pound has slipped after the Bank of England held interest rates and investors priced in a lower likelihood that there would be an increase any time soon.

In early afternoon London trading, the pound was 0.3 per cent lower at $1.3511.

The bank’s nine-member Monetary Policy Committee voted 7-2 to keep its main rate on hold at 0.5 per cent. That wasn’t a surprising decision following weaker than anticipated growth and inflation data.

David Cheetham, chief market analyst at XTB, said the overall tone of the minutes to the bank’s meeting suggest that it may be the case of “one-and-done as far as hikes are concerned.”

Last November, the bank raised its main interest rate for the first time in a decade, taking back the rate cut it enacted in Aug. 2016, in the immediate aftermath of Britain’s surprise vote to leave the European Union.

Cheetham said that hike “now appears to have been more a case of a reversal of the post-Brexit cut rather than the beginning of a sustained cycle of interest rate increases.”

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Noon

The Bank of England has kept its main interest rate on hold as a run of soft economic data has made it more cautious about the outlook for Britain.

The bank’s rate-setting committee voted 7-2 on Thursday to keep the main rate unchanged at 0.5 per cent, as widely expected in financial markets.

Just a few weeks ago, investors thought the bank would raise the rate by a quarter-point to its highest level since early 2009. However, that all changed after figures showed the economy barely grew in the first three months of the year and inflation fell by more than anticipated.

Many experts blame uncertainty related to Britain’s exit from the European Union for the slowdown.