London - The Bank of England is believed to have sold euros, making a profit of more than $1 million, on the same day two weeks ago that central banks from around the world staged a co-ordinated single currency rescue attempt.
Details of the transaction emerged as the euro fell back to the level at which central banks intervened, as key interest rate decisions loomed.
Official records released on Wednesday revealed that the British treasury instructed the Bank to buy e85 million (R539 million) on September 22, as part of a co-ordinated attempt by the Group of Seven (G7) industrialised nations to bolster the value of the single currency.
However, well-placed City traders suggested the Bank might have made a profit on the intervention after the treasury authorised it to sell the bulk of these euros later the same day, at a highly favourable exchange rate.
Analysts said data showing that UK government reserves fell by just $41 million last month - despite the co-ordinated intervention - supported suggestions that the Bank had quickly resold euros after the single currency rescue attempt became public.
The euro surged as much as 2c against the US dollar after the G7 intervention was announced, meaning the Bank could have earned more than $1 million in profit had it sold its euros at the top of the market. The treasury refused to comment.
Separate figures released by the European Central Bank (ECB) suggested it had committed between $3 billion and $5 billion to the rescue attempt, putting estimates of the total scale of the intervention at about $7 billion.
Details of the rescue effort emerged as the euro slid back towards its preintervention levels ahead of yesterday's ECB interest rate decision.
In early New York trading, the euro was worth about 87,2c, the same as before the central bank intervention.
Analysts said the euro was dragged lower by speculation that the ECB might keep rates on hold instead of using monetary policy to back up its intervention. Sentiment was also affected by weak French confidence figures.
Talks that the Bank of England's Monetary Policy Committee (MPC) would announce no change in interest rates yesterday undermined the pound, which slipped to one-week lows of $1,4525.
New economic figures were unlikely to sway the MPC's hand, analysts said.
A report on services by the Chartered Institute of Purchasing & Supply (CIPS) showed that the fuel crisis dampened growth in the sector last month. The CIPS headline indicator of services activity dropped from 58,3 in August to 55 in September.
A separate survey by the Confederation of British Industry (CBI) suggested the fuel crisis had hit growth, with retail sales volumes growing at their slowest rate for 17 months.
Data from Halifax, Britain's biggest mortgage lender, suggested there was still life in the housing market. Halifax said house prices rose by 1,6 percent last month, the biggest monthly gain since the beginning of the year.
Annual house price inflation rose to 9,2 percent.