Bank of England injects 75bn into the economy
6 October, 2011
Sterling fell rapidly as the Bank of England announced plans for an additional £75bn of Quantitative Easing today. This was significantly more than the £50bn that analysts thought may be injected, while many observers thought the Bank would wait until November before acting.
For the Pound, we saw an immediate drop of 1.5c against the Euro and a fall of nearly 2c against the USD. QE effectively dilutes sterling, which makes it less valuable, as well as signalling to markets that the economic recovery is far from secure.
Clients who are looking to send money abroad in the coming weeks may want to consider acting now to secure an exchange rate, as the Pound will now be vulnerable to any further bad news.
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