The British pound ended in the negative territory on Tuesday trading and settled to its lowest close in more than two weeks as the Bank of England remained uncertain on the future movement of its key interest rate.
Sterling dropped 0.65% against the US dollar and last traded at 1.3114 per greenback, the lowest peak since Oct. 10. Versus the euro, the pound gave up 0.8% to settle at 1.08 from 1.14 in the previous session.
The decline suffered by the British pound was mainly due to the central bank’s cautious stance regarding the direction of its interest rates. According to an analyst from Societe Generale, the remarks from key BoE officials about rate hike have been dovish, which create doubts among investors.
The recent comment came from the central bank’s Deputy Governor Jon Cunliffe who remained doubtful about lifting its rate next week, citing the economic slowdown in the United Kingdom as one big barrier to the decision.
The BoE officials will meet next week as they report for another batch of economic data including inflation report for the past three months and the GDP data, which are crucial and could weigh in largely to the decision of the bank.
Ahead of the policy meeting, 46 out of 64 economists expect that the central will press the green light in raising its interest rate.
The British pound remained struggling due to slower economic growth and political instability brought by the on going Brexit talks with the European Union.