By Yasin Ebrahim
Investing.com – The pound fell to a fresh one-year low against the dollar, and the bleeding could continue as Goldman Sachs became the latest bank to throw in the towel on an imminent Bank of England rate.
fell 0.36% to $1.3191, adding to its more than 2% loss since the Bank of England’s November meeting.
Goldman Sachs said it now expected the BoE stand pat on rates until February, a sharp contrast from its previous forecast for a 15 basis points rate hike in December.
The Wall Street bank pointed to the threat of Omicron forcing the U.K. to impose fresh restrictions that would muddy the outlook of the economy.
The call from the Goldman Sachs appeared justified somewhat as Prime Minister Boris Johnson on Wednesday said England would move to ‘Plan B’ rules including encouraging employees to work from home.
The tougher measures were imposed as the U.K. attempts to curb the spread of the Omicron variant, which has driven a sharp increase in infections.
The U.K. reported 45,102 new cases on Wednesday.
The Bank of England surprised markets at previous meeting in November after deciding to leave its benchmark rate unchanged as it preferred to see the impact on the labor market following the end of the government’s measures to protect the job market.
Bets on rate hikes were further reined in after Michael Saunders, a hawkish BoE member, signaled that the bank should adopt a wait and see approach to rate hikes amid concerns about the Omicron impact.
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