Bank of England unchanged on interest rates

This morning’s Bank of England minutes revealed their Monetary Policy committee voted 7-2 in favour of keeping interest rates on hold in July.

While widely expected, the minutes revealed that “recent developments had reduced the likelihood that a tightening in policy would be warranted in the near term”, meaning that the prospect of UK interest rate rises this year are at a low. This is a blow to those of you looking for better exchange rates for your overseas payments, since higher interest rates would be likely to increase the value of sterling.

With David Cameron’s poll ratings taking a hit and more news emerging around the phone hacking scandal all the time, further political implications for the UK could also hurt sterling in the shorter term.