World News

Pound falls after Carney says BoE could respond promptly to economic weakness

LONDON (Reuters) – Sterling fell to a near two-week low against the U.S. dollar after Bank of England chief Mark Carney said that there could be a “relatively prompt response” from the bank if it looked like weakness in the economy will persist.

Sterling was last down 0.5% at $1.3028, its lowest level since Dec. 27. <GBP=D3> Sterling also fell against the euro, down 0.6% at 85.27 pence. <EURGBP=D3>

British government bond yields fell, with two-year gilt yields last down almost 5 basis points on the day at 0.59% <GB2YT=RR>. Bond yields move inversely with prices.

Money markets currently price a roughly 60% chance of a 25 basis point interest rate cut by December, versus just over 50% at the end of 2019 <BOEWATCH>

(Reporting by the London Markets Team, writing by Yoruk Bahceli)