Investing.com - The pound fell to session lows against the dollar on Thursday after dovish Bank of England meeting minutes indicated that interest rates are likely to remain on hold at record lows for longer.
GBP/USD was down 0.31% to 1.5134 from around 1.5187 earlier.
According to the minutes, the majority of policymakers said low oil prices and subdued wage growth will keep a lid on inflation.
“There would need to be a sustained firming in domestic cost pressures, compared with current rates,” to push inflation back to the 2% target, officials said.
Inflation may turn positive in November, officials said, however “core inflation remains subdued.”
Most market players expect the BOE to begin slowly raising interest rates in mid-2016.
The Monetary Policy Committee voted eight-to-one to keep rates on hold at 0.5%. Ian McCafferty, one of four external members on the nine-person MPC, voted to increase rates to 0.75%.
The euro pared back losses against sterling, with EUR/GBP down 0.43% to 0.7229 after falling to lows of 0.7203 earlier.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.44% to 97.77.
The dollar moved broadly higher on Thursday after losses in the previous two sessions as investors turned their attention to next week’s Federal Reserve meeting amid expectations for an imminent rate hike.
Demand for the dollar continued to be underpinned by expectations that the Fed is on track to raise interest rates for the first time since 2006 at its upcoming meeting on December 15-16.
Higher interest rates would make the dollar more attractive to yield-seeking investors.