GBP/SEK settles below 1-week high, posts weekly gain

The GBP/SEK currency pair settled below recent high of 12.9161, its strongest level since August 1st, in the wake of the Bank of England’s policy decision.

The Bank of England lowered its benchmark interest rate by 25 basis points to 4% at its August 7th meeting – the lowest rate since March 2023.

It was a rare two-round vote that revealed sharp divisions over how to cope with sticky inflation and a softening economy.

Five of the nine policy makers supported a 25 basis point rate cut, while four voted for leaving rates on hold.

It was the first time in the BoE’s history that two votes were required to reach a majority on interest rates.

BoE Governor Andrew Bailey said it was a “finely balanced” decision and reiterated that future rate cuts would be “gradual and careful.”

Meanwhile, Sweden’s annual consumer inflation has picked up to 0.8% in July from 0.7% in June, the latest data by Statistics Sweden showed.

Still, the latest reading has remained well below the Riksbank’s 2% target.

And, Sweden’s consumer price index with a fixed interest rate (CPIF), Riksbank’s target variable for inflation, went up 2.8% year-on-year in July.

The exotic Forex pair gained 0.52% for the week.