Dollar falls against pound as US interest rate hike ‘greeted by cheer’

The Fed’s move raised its key short-term rate to a range of 3.75 percent to four percent, its highest level in 15 years. It was the US central bank’s sixth rate hike this year – a streak which has made mortgages and other consumer and business loans increasingly expensive and heightened the risk of a recession in the US. As of 5pm today (November 2), the pound was 1.1462 dollars compared to 1.1449 dollars at the previous close.On the Fed’s rate hike and its possible impact on the UK, Susannah Streeter from broker Hargreaves Lansdown told Express.co.uk: “The markets like certainty so the fact the Fed did not stray from the widely signposted path of another large hike was greeted by cheer, with the main US indices rising sharply on the announcement. “The mighty dollar also fell against the pound and if the trend continues it could ease some of the recent inflationary pressures on UK consumers, as it means imported goods priced in dollars will be cheaper.”Comments in the statement that the Fed would take into account the lag between its aggressive action in raising rates and the effect on the wider economy were particularly well received.”It’s a big hint that even though inflationary pressures don’t yet look like they are significantly easing, there is expectation that the cumulative effect of successive rate rises will start to feed through.” The US Federal Reserve has hiked its benchmark rate (Image: Getty) Federal Reserve Board Chairman Jerome Powell speaks during a news conference (Image: Getty) The Marriner S Eccles building of the United States Federal Reserve (Image: Getty) Governor of the Bank of England Andrew Bailey (Image: Getty)The persistence of inflated prices and higher borrowing costs has undercut the ability of Democrats in the US to campaign on the robust health of the job market as they try to maintain control of Congress.Republican candidates have hammered Democrats on the punishing impact of inflation in the run-up to the midterm elections which will end on Tuesday.The Fed’s statement on Wednesday was released after its latest policy meeting.Many economists expect Chair Jerome Powell to signal at a news conference that the Fed’s next expected rate hike in December may be only a half-point rather than three-quarters. DON’T MISS: Meghan’s ‘inappropriate’ living request ‘firmly’ denied by late Queen [REVEALED] ‘Sad and unfulfilled’ portrayal of Prince William torn apart [LATEST] Just how difficult is the UK Citizenship test Meghan found ‘so hard’? [REPORT] UK interest rate changes (Image: Express)Typically, the Fed raises rates in quarter-point increments, but after having miscalculated in downplaying inflation last year as likely transitory, Mr Powell has led the Fed to raise rates aggressively to try to slow borrowing and spending and ease price pressures.Wednesday’s latest rate increase coincided with growing concerns the Fed may tighten credit so much as to derail the US economy.The US Government has reported the economy grew last quarter and employers are still hiring at a solid pace, bt the housing market has cratered and consumers are barely increasing their spending. Shoppers walk past stalls at a market in Walthamstow, east London (Image: Getty)The Bank of England is set this month to unveil the biggest single interest rate hike since the 1980s in a bid to control the runaway inflation battering British households.In a crunch meeting on Thursday, the nine members of the Bank’s Monetary Policy Committee are expected to opt to push up the base interest rate from 2.25 percent currently to three percent, the highest since 2008.If, as expected, the Bank raises interest rates by 0.75 percentage points, it would be the biggest single hike since 1989.