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BOE rate hike not enough to lift British pound versus dollar

August 2, 2018

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The Bank of England’s interest-rate hike wasn’t enough to lift the British pound into positive territory versus the U.S. dollar on Thursday.

The U.K. central bank upped its benchmark rate by 25 basis points to 0.75% in an unexpectedly unanimous vote. While market participants had foreseen the rate increase, they assumed some dissent among the members of the Monetary Policy Committee.

In its statement, the BOE said that the slowdown in the economy in the first quarter was temporary and that recent data showed some recovery in the second quarter of the year. That said, the committee said it “continues to recognize that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal.”

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