GBP/INR is cautiously advancing in early trading on Friday, but the pair will end the week with a decline, after tumbling in the three days to Thursday. Yesterday, the quotation dropped by 0.65% after a similar decline on Wednesday.
On Thursday, the pair extended its bearish stance after Bank of England Governor Mark Carney suggested that the central bank might cut the interest rates if the economy would continue to show weakness. He revealed that there was a debate on the Monetary Policy Committee (MPC) about whether to cut the benchmark rate or leave it at 0.75%. During the previous two meetings, two out of nine MPC members voted to reduce the rate to 0.50%.
Carney said during his speech at a BoE event:
“With the relatively limited space to cut Bank Rate, if evidence builds that the weakness in activity could persist, risk management considerations would favour a relatively prompt response.”
The sterling then bounced back after the House of Commons gave their final approval to the Withdrawal Agreement Bill (WAB), which will allow the UK to leave the European bloc on January 31. Members of Parliament (MPs) voted 330 to 231 in favor of the deal.
After hours of debate in parliament, Brexit minister Stephen Barclay told MPs:
“It is time to get Brexit done. This bill does so.”
The bill should go through the House of Lords and is expected to become law in several weeks, allowing the UK to leave the EU by the current deadline.
The pound also found support after the Recruitment & Employment Confederation (REC) said that UK employers increased their number of new permanent staff last month for the first time in a year.
REC CEO Neil Carberry commented:
“With a new government in place and the path ahead looking more predictable, some businesses have decided that they have waited long enough.”
The permanent staff placement index increased last month to 51.9 from 48.8 in November, the highest growth since December 2018.