LONDON, December 9, Reuters -- The pound was up against the euro and held flat against the dollar on Thursday, well above its 2021 low against the dollar hit the day before when Britain announced tougher restrictions against COVID 19 as the Omicron variant spreads.
Boris Johnson, prime minister, told people to work from home where possible, wear masks in public places and use vaccine passes.
The spread of the new variant and subsequent imposition of those restrictions lowered expectations that the Bank of England will raise interest rates soon, which had boosted the pound against the dollar in recent months.
Market watchers had seen the central bank lifting rates soon as next week before the announcement of the new curbs.
The pound was just over the 2021 low of $1.3162 briefly touched on Wednesday by 1550 GMT, and was at $1.3197 against the dollar flat on the day.
The pound was 0.59% against the euro after a Reuters report said that the European Central Bank will debate policy tweaks at a meeting next week.
The ECB could temporarily hike asset purchases while continuing to defer rate hikes, sources told Reuters, an expectation that has been a recent source of support for the euro.