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Sterling has risen to $1.66 and €1.119 following the Bank of England’s decision to increase its quantitative easing programme by £25 billion and hold interest rates at 0.5 per cent.
Mark O’Sullivan, director of dealing at foreign exchange firm, Currencies Direct, said: “The news that the Bank of England did not inject £50 billion into its quantitative easing programme has been met with open arms.
“The market believes that this could be the Bank’s final injection of liquidity and this has been good news for the ailing pound.
“However, returning buyers should take heed. With the UK economy facing strong headwinds going into 2010, the market can not rule out the Bank revisiting its liquidity measures just yet. Increasing VAT levels, a slowing consumer market and the general election will all have an impact on the Bank’s decisions in 2010.”
