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The pound on Thursday moved off its lowest level after the Bank of England only met expectations with an extension of its quantitative easing program.
The pound GBPUSD, -0.84% rose as high as $1.2532 from $1.2475 as the Bank of England voted 8-to-1 to extend its quantitative easing program by £100 billion, which it said would run through the turn of the year.
Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, said the timing implies weekly gilt purchases likely will drop to £5.5 billion in the second half of this year, from an average of £10.7 billion to date.
The yield on the 10-year gilt TMBMKGB-10Y, 0.210% rose to 0.23%, up 4 basis points.
“The emerging evidence suggests that the fall in global and U.K. GDP in 2020 Q2 will be less severe than set out in the May Report. Although stronger than expected, it is difficult to make a clear inference from that about the recovery thereafter,” the central bank said.
The FTSE 100 UKX, -0.80%, which has flipped between gains and losses throughout the day, slipped 0.8%.
