The British pound is set to suffer its largest loss in six weeks after taking a 2% hit following the Bank of England’s (BoE) largest interest rate hike in three decades. Overall, the pound is down 3.3% this week.
While the pound managed to gain 0.63% against the dollar at $1.12295 on Friday morning, this rise did little to offset the losses incurred throughout the rest of the week. The sterling fared slightly better against other currencies, rising by 0.26% against the euro to 87.115 pence per euro.
On Thursday, the BoE announced an interest rate hike of 75 basis points as it continues its struggle to suppress double-digit inflation. Currently, the United Kingdom is at risk of facing its longest recession in at least a century.
BoE chief economist Huw Pill looked to put investors’ minds at ease, stating on Friday that while interest rates continue to be raised, they will not be raised as high as investors have expected.
Now, attention turns toward the United Kingdom’s finance minister Jeremy Hunt, who is set to deliver a fiscal announcement on November 17. Hunt is largely expected to discuss a potential rise in taxes and a crackdown on public spending.