12 Jan

Sterling steady ahead of MPC meeting

The pound and the euro were both awaiting the impact of interest rate decisions this week, with the monetary policy committee (MPC) today set to determine the base rate.

This morning the euro was at 1.4559 against the pound, while the dollar stood at 1.7693 to sterling.

Most observers expect the Bank of England will keep rates at their current level of 4.5 per cent, with inflation indicators dictating the decision.

After a better-than-expected report from the high street, which the British Retail Consortium claimed had enjoyed its best Christmas for four years, the likelihood is that rates will not rise yet.

With Sainsbury's today reporting strong results in another sign of retail strength and consumer spending, it could be another few months before the next rate rise, although there was less encouraging news from HMW.

The entertainment retailer said first-half profits fell, with like-for-like sales during December down on 2004, as its chief executive announced his departure.