U.K. Pound Extends Gaiin Against Euro After ECB Unexpectedly Cuts Key Rate

The pound extended gains against the euro and gilts stayed lower after the European Central Bank unexpectedly cut its key interest rate.

Sterling was 0.2 percent stronger at 86.02 pence per euro at 12:47 p.m. London time. The yield on the 10-year gilt was six basis points higher at 2.35 percent.

ECB officials, meeting under the presidency of Mario Draghi for the first time, cut the benchmark interest rate by 25 basis points to 1.25 percent, wrong-footing 51 of 55 economists in a Bloomberg News survey. Four predicted a quarter-point move and two expected a half-point cut.

To contact the editor responsible for this story: Mark McCord at mmccord2@bloomberg.net

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