Sterling strengthens after rate cut

6 February 2009

There was good news for Brits seeking to buy a home in the eurozone this morning, after sterling hit a two-month high against the euro, following the Bank of England’s decision to cut interest rates to an all-time low yesterday.

The UK central bank’s move to proactively slash rates from 1.5% to 1%, while the European Central Bank left rates on hold at 2%, saw the pound’s value rise to just over €1.15 for the first time in two-months.

The pound also strengthened against the US dollar, appreciating to $1.4767.

Nick Fullerton, managing director, says: “We have not seen highs like this against the euro since October 2008, when the Bank of England first started slashing interest rates, when it seemed that sterling was the only major currency to take a pounding. However, now we can see that the euro and US dollar are also severely affected.”