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The pound is crashing ahead of the Bank of England's latest interest rate decision

Jan 14, 2016, 17:02 IST

The pound is struggling on Thursday ahead of Bank of England Governor Mark Carney's monthly interest rate announcement.

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Carney will announce his decision at 12:00 p.m. GMT (7:00 a.m. ET) and virtually no one is expecting him and his Monetary Policy Committee to have decided anything other than to leave interest rates untouched at 0.5%, where they've stayed for more than six and a half years.

Right now, because of the widespread expectation that rates will stay put, markets are less interested in what the MPC decides to do this month, but rather when the Bank of England will finally take the plunge and raise interest rates.

Expectations of when that will happen are getting further and further into the future, and as a result, the Britain's currency is shrinking on Thursday. At 11:25 a.m. GMT (6:25 a.m. ET), the pound is down by 0.15% against the US dollar, and more than 0.6% against the euro.

The pound hit its lowest mark against the greenback since mid-2010 earlier. It has since recovered a little, but £1 will now buy you just $1.4388. Here's how that looks:

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The euro also hit a milestone this morning, and at one point bought more than £0.76 for the first time in more than a year, helped by speculation that ECB officials are wary of more QE any time in the near future, as reported by Reuters. This is how its looking:

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Elsewhere in the markets, European equities are back to the struggle after a couple of days growth, thanks largely to a renewal of oil's downward slide.

Both oil benchmarks are in positive territory as of 11:25 a.m. GMT (6:25 a.m. ET), but earlier in the day, both slumped, with Brent crude, the European benchmark briefly dipping below the $30 (£20.87).

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Oil's early morning swoon scared European markets, with all of the major bourses slipping more than 2%, and most hovering near to 3% losses. France's CAC 40 is the biggest loser right now, down 150 points, nearly 3.4%. The DAX 30 in Germany is not far behind, seeing losses of 3.2%.

In Britain, the FTSE has fallen more than 2%, with Intercontinental Hotels, Schroders, and Barclays Bank, the worst hit.

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