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London - The pound dropped versus most of its 16 major peers after Bank of England policy maker Martin Weale said he’s begun to favour immediate stimulus for the UK economy.
Sterling, which already was the biggest loser versus the dollar over the past month, extended its drop after the Financial Times reported that Weale, an independent member of the BOE’s Monetary Policy Committee, changed his mind on the timing of stimulus after purchasing managers’ indexes released July 22 were a lot worse than he had thought. The next central-bank announcement is set for August 4.
"We still project a weaker sterling in the months to come, driven by monetary-policy easing by the Bank of England," said Morten Helt, a senior analyst at Danske Bank A/S in Copenhagen. Helt, who sees the pound falling to $1.22 in three months, said he expects less direct investment into the UK after the Brexit decision.
The pound dropped 0.1% to $1.3130 as of 10:06 a.m. in London. It reached a 31-year low of $1.2798 on July 6, before rebounding to as high as $1.3481 by the middle of the month.
Sterling touched the lowest since 1985 after Britain voted to leave the European Union last month. BOE officials voted 8 to 1 to keep the main rate at a record-low 0.5% and maintained the asset-purchase target at £375bn in their latest policy announcement on July 14.
