Opposition to interest rate rise hits pound

Sterling dipped today after the two dissenters on the Bank of England’s monetary policy committee failed to recruit any further support for their call to put up interest rates.

The pound shed around a third of a cent against the dollar to $1.6292 following the release of the latest MPC minutes which showed that the vote on the nine-person committee in September remained 7-2 against a rate rise.

Sterling plummeted 2.5 cents against the dollar earlier this month after a shock opinion poll showed that the “Yes” vote in the Scottish referendum was in the lead for the first time, although it has since recovered most of that lost ground.

The pound has been on a downward trend since early July as traders have put back their expectations for a base-rate rise.

September’s MPC minutes showed that external members Ian McCafferty and Martin Weale voted again for a 0.25 basis point rate rise.

Though the MPC upgraded its growth forecasts for the third quarter to 0.9%, it noted the “downside risk” to growth in the medium term had increased because of the eurozone’s difficulties.