British Pound (GBP)
Central Bank: Bank of England (BoE)
Current Interest Rate: http://www.bankofengland.co.uk/

Her Majesty's Currency
As the primary governing body in the United Kingdom, the Bank of England serves as the British equivalent to the Federal Reserve System. Like the Fed, the governing body establishes a committee headed by the governor of the bank. Made up of nine members, the committee is comprised of four external members (who are appointed by the chancellor of exchequer), a chief economist, committee chief economist, director of market operations and two deputy governors.

The Monetary Policy Committee (MPC) holds meetings every month where it decides on interest rates and other monetary policies, with chief considerations given to the total price stability in the British economy. As such, the MPC also sets a benchmark of consumer price inflation. If this benchmark is not met, the governor has the unenviable task of notifying the chancellor of exchequer through a letter, one of which came in 2007 as the U.K.CPI rose quite sharply during the year. The release of this letter tends to be an indication to the markets of probable contractionary monetary policy. (For more on the role of the CPI, read The Consumer Price Index: A Friend To Investors.)

With a greater degree of volatility than the euro, the British pound (GBP, also sometimes referred to as "pound sterling" or "cable") often trades within a wider range through the day. With swings as large as 100-150 pips, however, it is not unusual to see the pound trade as narrowly as 20 pips. Swings in popular cross currencies can give this major a volatile reputation, with traders focusing on pairs like the British pound/Japanese yen and the British pound/Swiss franc. As a result, the pound can be seen as most volatile through both London and U.S. sessions, with smaller movements during Tokyo hours (7pm - 4am EST). (Read more about currency pairs in Using Currency Correlations To Your Advantage.)



Swiss Franc

Related Articles
  1. Investing

    Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.
  2. Trading

    Top 6 Most Tradable Currencies

    Here are six currencies that can diversify your portfolio.
  3. Trading

    GBP/USD: How Low Can it Go in Brexit Fallout?

    The British Pound has taken a beating on the heels of Brexit, but may have much further to fall in the coming months.
  4. Trading

    The British Pound: What Every Forex Trader Needs To Know

    As a strong alternative to the dollar it is likely that the pound will remain a preeminent global currency for some time to come.
  5. Investing

    The Top 3 British Pound ETFs

    If you’re betting on a recovery after Brexit, you might want to consider these British pound ETFs.
  6. Trading

    5 Reports That Affect The British Pound

    The pound is one of the world's most popular traded currencies, and is heavily impacted by these factors.
  7. Trading

    The New World Of Emerging Market Currencies

    Take advantage of foreign currency markets without stepping out of your house.
  8. Investing

    British Pound Tumbles on Potential ‘Brexit’

    The British pound tumbled by 1.65% against the dollar Monday after Mayor Boris Johnson said he will campaign in favor of Britain exiting from the EU.
  9. Investing

    BOE Seen Set to Cut Rates as Brexit Fallout Widens

    The Bank of England is seen set to cut interest rates tomorrow as the economy is showing signs of weakness in the wake of the Brexit vote.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center