Watchdog probes jump in sterling before Bank of England rate decision
City watchdog the Financial Conduct Authority has opened an investigation into the jump in the value of the pound shortly before the Bank of England’s interest rate decision yesterday.
The Bank confirmed it asked the FCA yesterday to investigate the unusual spike in the value of sterling.
The value of sterling jumped about 15 seconds before midday yesterday, when the Bank’s Monetary Policy Committee (MPC) made its announcement it was holding interest rates steady.
Sterling rose from $1.3023 to $1.3089 against the dollar, before continuing to rise after the announcement.
An FCA spokesperson said: “We are aware of the incident and are looking into it.”
Former MPC-member Andrew Sentance told the BBC that the rates decision is made the day before it is announced.
“There is confidential information circulating in the Bank for quite a long time,” he said.
“But it could just be something coincidental, so we shouldn’t jump to conclusions,” he added.
The Bank closely monitors the value of sterling around sensitive announcements and routinely asks the FCA to investigate anything unusual.
In December, the Bank asked the FCA to investigate after it emerged that hedge funds were being offered access to an audio feed that supplied information from its press conferences faster than the official broadcast.
The Bank confirmed what it called a “wholly unacceptable” use of a back-up audio feed by a third-party supplier.