The Great Britain pound sank today after the Bank of England predicted that economic growth and inflation will decelerate in the near future. UK employment data turned out be worse than analysts have expected, adding to pressure on the sterling.
The BoE released quarterly Inflation Report today, and it was not particularly optimistic. The report said:
Growth is projected to be a little weaker than in August. It slows slightly in the near term, settling back to around historical average rates, underpinned by a gradual pickup in demand abroad and a revival in productivity and real household income growth at home.
As for consumer prices, the outlook was also not particularly good:
Inflation has fallen further below the MPCâs 2% target, reflecting the impact of lower food, energy and import prices and some continued drag from domestic slack. Inflation is expected to remain below the target in the near term, and is more likely than not to fall temporarily below 1% at some point over the next six months.
Released earlier, the employment report disappointed economists. Claims for unemployment benefits fell less than was expected. The unemployment rate remained the same while analysts predicted a small decrease.
GBP/USD tumbled from 1.5917 to 1.5814 as of 15:25 GMT today, trading near the lowest level since September 2013. GBP/JPY sank from 184.27 to 182.09. EUR/GBP advanced from 0.7833 to 0.7887 after falling to 0.7801 earlier.
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