The British pound gains the best value against the dollar since the Brexit Vote after the official September meeting of the Bank of England.
The central bank of England, following a meeting held in September indicated its plans to increase interest rates in the months to come. Financial analysts at a top swiss bank have the notation that the decision is a wrong move for the UK economy stating that the rates could be restored back to the initial 0.5% before the Brexit Referendum .
The pound increased by more than 1% against the dollar to exceed the $1.36 value on Friday. This has been the highest since the Brexit vote held June 24 last year. The pound also gained value against the euro by more than 1% to exceed €1.13 though it is still about 10% lower since the Brexit Vote.
Pushing For More Interest Rate
A policy maker of the Bank, Gertjan Vlieghe stated that the bank is pushing to increase interest rates for the first time in 10 years as there is now visible proof that the UK economy is improving though he had earlier disagreed about tightening policy and voted against a rise in the rate.
He further revealed that the growth of the information and pending inflation which rose to 2.9% in August is recommending that the bank reaches a stage where the rate may increase, which combatted his initial thoughts that waiting is the best answer to financial policy.
Developing hypothesis of a rise in rates strengthens that pound against other different monetary forms on the grounds that higher loan rates would make pound sterling more appealing to investors.