BoE says watching the markets after the fall of the pound | Photo credit: Shutterstocks
LONDON, Sept 26 (Reuters) – The Bank of England (BoE) said on Monday it was monitoring financial markets very closely and would not hesitate to raise interest rates if needed as the pound sterling fell to its all-time low against the dollar.
“The Bank is monitoring financial market developments very closely in light of the significant revaluation of financial assets,” she said.
“The MPC (Monetary Policy Committee) will not hesitate to change interest rates if necessary to bring inflation back towards the 2% target in a sustainable way in the medium term, in line with its mandate,” he said. -she adds.
The Bank of England further stated that, as the MPC had made clear, a full assessment of the impact of recent government announcements and the fall in the pound on demand and inflation would be made when its next monetary policy meeting.
The new British Finance Minister, Kwasi Kwarteng, presented on Friday a program to support the economy very largely dominated by tax cuts and by a massive recourse to borrowing, a plan freshly welcomed by the financial markets.
The pound, which lost up to 5% on Monday, falling to $1.0327, its lowest level since the UK’s switch to the decimal system in the early 1970s, was trading around 4:50 p.m. GMT at $1.0696 . (Report by Joice Alves; French version Claude Chendjou, edited by Tangi Salün)