British Pound Sells Off Following Bank of England Announcement

Fresh from yesterday’s trading loss, on the back of rising criticism about BoE’s GBP50 billion swap, the British Pound regained posture against the US Dollar, rallying by 150 pips.

In light of the Royal Bank of Scotland’s $24 billion sell of shares and the BoE’s attempt to increase liquidity in order to boost the ailing housing market, speculations run rampant that the worst is yet to come for the once resilient UK economy. Today, Finance Minister Alistair Darling is set to meet with key mortgage lenders, in hopes of convincing them to cut costs of home loans and find ways of helping people refinance their mortgages. Investors eagerly await this month’s central bank minutes set to release on Wednesday, in hopes of finding a silver lining, in terms of a future rate cut. As the economy trudges along, it remains to be seen what sorts of surprises the government pulls out of its black hat, but it can be assumed that it will be awhile before the UK economy start chugging smoothly.