Sterling fell against the dollar on Friday, 6 November, as a global stock-market sell-off sent investors towards the dollar and overshadowed the Bank of England's interest-rate rise the day before.

Down against the dollar, steady against the euro

The pound was last at $1.3399, down 0.4% on the day, although it was roughly flat on the week after gains in earlier sessions. Against the euro it held steady at 83.41 pence, close to its highest since March 2025, a level it reached on Thursday in the aftermath of the Bank's decision.

Thursday's rate rise

The Bank of England raised Bank Rate by a quarter of a point to 4% on Thursday, its first increase since August 2023, with the Monetary Policy Committee voting 8-1. Catherine Mann, the lone dissenter, wanted a half-point rise. Governor Andrew Bailey signalled that another increase could follow unless the conflict in the Gulf eases and oil prices fall.

The sell-off won the day

The rate rise would normally support a currency, but Friday's mood worked the other way. Lee Hardman, senior currency analyst at MUFG, said the market impact of the Bank's update was overshadowed by the deepening sell-off in AI-related investments, which lifted the dollar as investors cut exposure to currencies geared to global growth.

Commerzbank said the hawkish decision had only briefly lifted the pound, which gave up its gains as the day went on, and it expects the Bank to wait until February for its next rise rather than move in December. Until then, the bank said, sterling is likely to struggle to trade much higher.

Two-year gilt yields rose 3 basis points to 4.77% after Thursday's decision, while LSEG data cited by CNBC put the chance of another rise in December at about one in four.