Investing.com - The pound fell to the day’s lows on Thursday after the Bank of England kept interest rates steady and issued a fresh warning about the upcoming European Union membership referendum, saying uncertainty could "spill-over" into global markets.
GBP/USD was down 0.72% at almost two-month lows of 1.4105 from an intra-day low of around 1.1434 ahead of the announcement.
The BoE left interest rates unchanged at their record low of 0.5%, where they have been since March 2009.
The bank also maintained the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
The BoE reiterated that the possibility of a Brexit was "the largest immediate risk facing U.K. financial markets, and possibly also global financial markets."
The bank’s meeting minutes said there are signs that major spending decisions are being delayed, such as car and house purchases, as consumers and businesses wait to see if the U.K. votes for Brexit on June 23.
The bank also warned it looked increasingly likely sterling would fall further after a vote to leave the EU.
“On the evidence of the recent behavior of the foreign exchange market, it appears increasingly likely that, were the UK to vote to leave the EU, sterling’s exchange rate would fall further, perhaps sharply”, the minutes said.
The bank warned that a vote to leave the EU could materially alter the outlook for output and inflation.
The minutes also said that top policymakers had been briefed on contingency planning as it prepares measures to prevent markets seizing up in the event of a leave vote next week.
The policy decision after two new opinion polls showed the Leave campaign in the lead ahead of next Friday’s Brexit referendum.
An IPSOS MORI poll, published in the Evening Standard newspaper, showed that the 53% of voters supported the Leave campaign compared with 47% support for the Remain camp, excluding undecided voters.
A poll by Survation showed 45% in favor of leaving the EU and 42% in favor of remaining in the 28 member bloc.
The Federal Reserve cited the Brexit referendum as a factor in its decision on Wednesday to keep interest rates on hold. The U.S. central bank lowered its forecasts for how much they expect to hike interest rates in the next few years, but indicated that it is still planning two rate hikes this year.
Sterling was slightly higher against the weaker euro, with EUR/GBP dipping 0.1% to 0.7917.
The pound remained sharply lower against the broadly stronger yen, with GBP/JPY down 2.06% at 147.48, after falling to lows of 146.40 earlier, the weakest level since April 2013.
The yen jumped higher after the Bank of Japan left monetary policy on hold at the conclusion of its two-day meeting on Thursday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.38% at 95.03.