The British pound came under pressure after a Bank of England official thought to be a hawk on interest rates suggested rates may need reducing.
Michael Saunders, who in 2017 voted for rate hikes, said in a speech that “persistently high uncertainty,” even if the U.K. reaches a deal with the European Union, will make it “probably” appropriate to maintain an expansionary monetary policy “and perhaps to loosen further.”
“This came as a shock – Saunders is known as a hawk, but his stance here was very dovish,” said Ricardo Evangelista, senior analyst at ActivTrades.
The pound GBPUSD, -0.2434% fell under $1.23 for the first time in three weeks, sliding to $1.2286 from $1.2323 on Thursday.
The pound’s weakness by contrast spurred gains for the FTSE 100 UKX, +1.13% , with the stock market index rising 0.79% to 7409.24.
Gains were led by Pearson PSON, -1.32% , which despite a 3% advance is still much lower than where it stood before warning on U.S. higher education revenue on Thursday.