Sterling edged lower on Friday and was on track for its worst month versus the dollar since September after the Bank of England kept its policy unchanged.
The BoE kept the size of its stimulus programme at the same level and left its benchmark interest rate at an alltime low of 0.1 on Thursday. It also said inflation would surpass 3 as Britains economy reopens, but the climb further above its 2 target would only be temporary.
GBP was an underperformer yesterday, hit by a BoE that was not quite as hawkish as traders had expected, analysts at ING said.
Investors had hoped a more optimistic economic assessment from the BoE would push sterling back towards 1.40.
Sterling was down 0.1 versus the dollar at 1.3910 at 0824 GMT, and it was on track for its worst month against the greenback since September 2020.
Earlier this month, sterling dropped below 1.38 against a strengthening dollar after the U.S. Federal Reserve surprised markets by signalling it would raise interest rates and end emergency bondbuying sooner than expected.
News of the rapid spread of the Delta COVID19 variant in Britain has also weighed marginally on sentiment.
England has delayed the final phase of its economys reopening by a month to July 19, aiming to use the extra time to speed up the countrys vaccination programme.
Britain recorded 16,703 new cases of COVID19 on Thursday, the highest total since early February.
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