Pound comes under new pressure after Bank of England fails to raise rates

theguardian.com:

The pound came under renewed pressure on Monday afternoon after the Bank of England failed to announce an emergency interest rate hike.

Anticipation was building among investors that the Bank would raise interest rates in response to the weak pound, which hit a record low against the dollar over the weekend. The pound had regained some ground earlier on Monday, but the Bank failed to calm markets when it stopped short of announcing a rise, saying instead that it would monitor markets closely and assess the situation at its next policy meeting in November.

The pound was down nearly two cents at $1.0675 after the statement,

The central bank said: “As the MPC [monetary policy committee] has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the government’s announcements, and the fall in sterling, and act accordingly.

“The MPC will not hesitate to change interest rates as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit.”

Markets have become increasingly concerned about the prospects for the UK economy since the government announced plans on Friday to cut taxes by the largest amount in 50 years.