Mystery Pound Trading Before BOE Decision Wasn’t First, WSJ Says

(Bloomberg) --

A sudden move in the British pound before last month’s Bank of England decision wasn’t a unique occurrence, according to the Wall Street Journal.

The pound shot up on Jan. 30 just before officials surprised markets by announcing they had voted 7-2 for no change to policy, even though many had been expecting a close decision or a rate cut. Trading volume data show there was also an unusually high level of activity in the currency before the prior month’s interest-rate decision, the Journal said.

The Financial Conduct Authority said it is looking into unusual activity ahead of the Jan. 30 decision but an FCA spokesman declined to comment on whether the probe included other instances, according to the Journal. Alex Kurov, a finance professor at West Virginia University, told the WSJ that the movements in December were similar to the activity seen in January.

“High volume and sizable price moves in the 10 to 15 seconds before the last two announcements were unusual,” said Kurov, whose work includes research into market reactions to macroeconomic data. “There’s usually very low volume before announcements.”

The U.K.’s financial regulator is already probing whether a high-speed audio feed of Bank of England press conferences could have given traders an unfair advantage. The audio issue came to light in December and has caused controversy, as central bank announcements are among the most market-sensitive news releases.

To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Sara Marley, Christopher Elser

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