Sterling falls after the speech of the Governor of the Bank of England

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AFP

Sterling lost about 1 per cent of its value against other currencies, after BoE Governor Michael Carney’s speech on Thursday, to its lowest level in more than two years.

Carney said there would likely be a need to take a number of measures to urgently stimulate the British economy after the British agreed in a referendum last week to exit the European Union.

Carney had previously warned of the risks of entering the British economy in a recession if voters chose to leave the European Union.

He also stressed that the Bank of England’s monetary policy committee (the British central bank) will announce its initial assessment of the economic situation after its next meeting two weeks later.

After Carney’s speech, the sterling exchange rate fell more than 1 percent against the European single currency (the euro), reaching its lowest level since March 2014.

Sterling also fell about 1.6 percent against the US dollar.

Experts believe the Bank of England may decide to cut the current stable interest rate at its lowest level ever, which is half a percent.

A cut in the interest rate would affect the savings of depositors in banks and make the sterling currency less attractive to investors.