Pound hits one-month low as BOE drops more rate cut hints

LONDON: The pound fell to its lowest so far this month on Friday, after data showed UK consumer spending stagnated in February and Bank of England (BoE) Governor Andrew Bailey said rate cuts “were in play” this year.

Sterling fell 0.6% to $1.262, its lowest since March 1, having dropped nearly 1% the previous day after the BoE kept rates unchanged but signalled a loosening in monetary policy was on the cards.

Against the euro, the pound was down 0.2% at 85.99 pence.

On Thursday, the BoE left interest rates unchanged, but in its statement, it suggested it was edging towards making a change to monetary policy.

Furthermore, two members of the Monetary Policy Committee that had previously voted to raise rates instead voted to maintain them - a decision many in the market had not expected.

As recently as two weeks ago, futures markets had priced in little more than two rate cuts from the BoE this year, most likely in August.