By John Beresford-Peirse
London, Sept. 13 (Bloomberg) -- The British pound was little changed against the dollar amid speculation the Bank of England may lower interest rates if Tuesday's terrorist attacks on the U.S. hurt growth in the biggest economy.
The Bank of England is ``clearly ready to move'' interest rates lower, the bank's governor Edward George said yesterday in an interview with the British Broadcasting Corp. While a coordinated effort between U.S. and European central banks to lower rates was unlikely, the BOE is poised to reduce borrowing costs if needed, he said.
``Central banks have shown themselves to be responsible in providing adequate liquidity,'' said Neil Parker, senior economist at Royal Bank of Scotland. ``If they need to cut they will.''
The pound was trading at $1.4676 compared with $1.4671 yesterday, when it dropped 0.6 percent. Against the euro, it was little changed at 61.79 pence from 61.81.
Finance ministers and central bank governors from the Group of Seven industrial countries pledged yesterday to ensure the attack on the U.S. doesn't disrupt the global economy.
Central banks yesterday lent $118 billion to ensure banks don't run out of cash. The European Central Bank lent about $63 billion and the Bank of Japan said it doled out almost $17 billion. The Federal Reserve added $38.25 billion cash to the banking system with overnight repurchase agreements and said it may add more.
The pound may benefit as a ``safe haven currency'' if the U.S. economy and dollar suffer as a result of the terrorist attack, said Stefan Schilbe, an economist at HSBC Trinkaus in Dusseldorf.
A report on U.K. retail sales is expected at 9:30 a.m. London time, although analysts said this will probably not have an effect on the market.
``What happens in the U.S. is key,'' said Royal Bank of Scotland's Parker. ``The U.K. and euro area are irrelevant until we have a better understanding of what's happening in the U.S. The dollar will lead'' all other currencies.
The U.K. Conservative Party will announce the result of its leadership election at 5:15 p.m. London time.