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Bank of England holds rates, pound steady
Sterling jumped to a six-day high against the dollar on Thursday after Bank of England policymakers voted unanimously to keep interest rates unchanged.
The 9-0 vote by BoE monetary policy committee members to keep rates at a record low 0.5 percent was good news to investors who were concerned that there could have been some dovish voters who might vote in favour of a rate cut.
BoE Governor Mark Carney held a press conference after the policy meeting and said that Brexit would be the most significant risk to UK growth and inflation forecasts.
In its quarterly inflation report, published simultaneously with the rate decision, the BoE stepped up warnings about the economic risks of a Brexit, saying sterling could weaken and unemployment would probably rise.
But it also said the economy would fully recover from the damage if Britain voted on June 23 to stay in the EU.
The BoE cut its growth forecast for this year to 2.0 percent from 2.2 percent in February, reflecting how uncertainty about the referendum is already weighing on the economy.
By Friday, the pound was trading at $1.4437, having reached a high of $1.4532 on Thursday. Against the euro, the pound strengthened to 78.46 pence, its strongest in nine days, before easing to 78.75 pence by Friday.
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