Sterling surges but focus falls on UK outlook

The Bank of England wrong-footed investors by keeping interest rates on hold, but held out the prospect of a stimulus package soon to help the economy cope with Britain’s decision to leave the EU.

The battered pound surged by more than 2% as the central bank held its bank rate at 0.5%, contrary to widespread expectations of a first cut in more than seven years.

Governor Mark Carney said two weeks ago that he expected the bank to give the economy more help over the summer.