Andy Scott, economist at HiFX, said: “Sterling fell by around over 1% against both the dollar and the euro, following the release of the Bank of England’s minutes and MPC vote that showed only one member voted again for a rate hike.
“Whilst there wasn’t anything in the report that should come as a major surprise, there was clearly a slightly more cautious tone from the BoE than the market was expecting. There was nothing to suggest their focus is solely on when to hike rates, they’re still in a wait-and-see approach, wary of increasing risks from overseas. We maintain our view that whilst domestic demand looks robust, there are strong enough headwinds to want to keep rates on hold well into next year, and if some of them develop, into 2017.
“The drop in Sterling from a 2-1/2 month higher of 1.42 this morning will provide some relief to UK businesses who export to Europe, after the Euro fell 6% over the last month following the ECB’s signal that it may cut rates and increase Q.E. in December.”