THE pound has plummeted today after the Bank of England hinted that it could implement negative interest rates.
The central bank today agreed to hold the base rate at a record low of 0.1 per cent but added that it may drop below zero in the near future.
The Bank said that it plans to "explore how a negative Bank Rate could be implemented effectively" but only if inflation and GDP don't continue to improve.
Shortly after the comments, the pound fell around 0.1% against the dollar and 0.8% against the euro.
Against the dollar, it fell to as low as $1.2883 – a cent below where it had been before the midday announcement.
Although it seems like the value of sterling has dropped dramatically today, it is not even close to its lowest point over the week.
Last Friday the pound was weakest against the dollar when it sunk to $1.2779.
The pound also dropped against the euro today to €1.0911, from €1.1008 at 8am this morning.
Again, sterling still isn't at it's weakest against the euro across a seven day period – it hit a low of €1.0776 at the end of last week.
All nine members of the Monetary Policy Committee (MPC) voted to leave interest rates as they were and keep its quantitative easing programmed in a bid to boost the economy during the coronavirus crisis.
More to follow…
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