24 January 2001, 20:20  British Pound Falls as More Policy-Makers Vote for Rate Cut

London, Jan. 24 (Bloomberg) -- The British pound fell against the dollarafter the Bank of England's monthly meeting notes showed morepolicy-makers voted to cut interest rates this month than in December. The pound dropped to $1.4619, from $1.4700 yesterday, and $1.4660before the report. On Monday, sterling touched $1.4520, its lowestsince Dec. 14. The U.K. currency rose to 63.13 pence per euro, from63.80 yesterday, after German reports suggested euro-zone inflationmay be higher than previously thought, which may limit the scope forrate cuts in the 12-region economy. The BOE's vote split is watched by investors as a guide to future ratepolicy. The 5-4 vote at the Monetary Policy Committee's Jan. 11meeting was closer than last month's 7-2 split, making a rate cut nextmonth more likely. ``These notes have increased the probability that interest rates will becut next month, and sterling has reacted to that,'' said FrancescaFornasari, currency economist at Lehman Brothers International. Shesees the BOE cutting rates by 25 points next month, which is ``allthey will do.'' In December's decision to keep rates on hold for the 11th straightmonth, DeAnne Julius and Sushil Wadhwani voted for a quarter-pointcut. Those were the first votes for a rate cut since June 1999.Christopher Allsop and Charles Bean joined them this month, comingwithin one vote of swaying the nine-member Monetary PolicyCommittee. The split wasn't expected by analysts. ``While we had flagged up the possibility of a 6-3 vote, a 5- 4 outcomewas the stuff of fantasies,'' said Ciaran Barr, chief U.K. economist atDeutsche Bank AG. ``We believe a February move is now a donedeal.''

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