Markets think Omicron plan B will delay rise in UK interest rates

Fears of economic slowdown mean Bank of England less likely to intervene to dampen inflation

• Coronavirus - latest updates
• See all our coronavirus coverage

New restrictions to limit the spread of the Omicron variant will delay an interest rate increase from the Bank of England despite signs that the government's measures will add to the cost of living for hard-pressed consumers, the City believes.

The pound fell on the currency markets on expectations that Threadneedle Street's monetary policy committee will shy away from the first increase in borrowing costs since the start of the pandemic, and instead join the Treasury in adopting a wait-and-see approach to Omicron.