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Gordon Brown is destroying the pound

Posted February 11, 2008

"The pound also plunged against the dollar, despite clear implications that UK interest rates will remain well above those in the US for a long time to come. So what’s going on?" — John Stepek

by John Stepek, MoneyWeek

Baltimore and London (TFN) —It seems the Bank of England just can’t please anyone.

It cut interest rates yesterday by a quarter point, which was basically what everyone had been expecting. But it hedged the cut with a warning that inflation looks like it could well spike higher in the months to come.

The suggestion that the Bank isn’t going to panic and follow the Federal Reserve in throwing caution to the winds, sent the FTSE 100 plunging. It ended the day down by more than 150 points, at 5,724.

But at the same time, the pound also plunged against the dollar, despite clear implications that UK interest rates will remain well above those in the US for a long time to come. So what’s going on? Read on to learn more.

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Posted by John Stepek · Filed Under International Investing 

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