Sterling on the up after Bank holds rates again

THE pound surged against the dollar and the euro after the Bank of England froze interest rates at 0.75pc.

Sterling rose above $1.31 and towards €1.19 after the monetary policy committee voted 7-2 in favour of leaving rates unchanged.

But currency traders said sterling started to rise up to 15 seconds before the announcement – raising fears that the decision had somehow leaked.

Last month the Bank admitted that a third party contractor had accessed private audio feeds of market- sensitive press conferences.

The decision to hold rates was the last to be presided over by governor Mark Carney, who highlighted encouraging signs for the economy in early 2020.

But he added: ‘To be clear, these are still early days, and it is less of a case of so far so good than so far, good enough.’

The Bank cut its forecast for economic growth for this year from 1.2pc to 0.8pc.

Growth is expected to pick up to 1.4pc in 2021, down from previous projections of 1.8pc, and 1.7pc in 2022, down from 2pc.

Traders had been expecting the decision to come down to the wire as weak economic data since last November’s rate-setting meeting were countered by signs that the global economy was stabilising.

And business surveys conducted following last month’s Tory win in the General Election indicated that UK firms were becoming more confident in the country’s prospects.

But data from exchange company CME showed there remains a 60pc chance the Bank will cut rates this year, meaning Carney’s successor Andrew Bailey could have an eventful first few months in the job after he takes over in March. ÷ THE US economy grew by 2.3pc last year, missing Donald Trump’s 3pc target for a second year in a row.