Investing
FTSE and sterling fall after BoE unveils guidance
London’s leading share index fell quickly into the red after new Bank of England (BoE) governor Mark Carney unveiled plans to issue market’s forward guidance on interest rates.
The FTSE 100 was down 0.62% after the Bank’s inflation report was published, having earlier been in positive territory.
That loss was subsequently extended into a 1% fall on the day shortly after 11:00 BST, bringing the index down to 6,540.
The pound also fell 0.65% against the dollar to 1.52, having earlier been trading flat on the day, as the BoE said it would not consider raising rates until unemployment fell to 7%.
Sterling also dropped against the euro, down 0.42% to 1.18.
Meanwhile UK gilt yields rose, with the benchmark 10-year yield spiking from 2.47% to 2.51%.
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But as the FTSE extended its fall, both gilts and sterling recovered some of their own losses as investors continued to assess the implications of the Bank’s guidance.