UK economic data has once again missed forecasts, and that is causing a drop for the pound against nearly all of its major counterparts. Pound is struggling today as traders become concerned that Bank of England policymakers will keep interest rates lower for an extended period of time. The disappointing data overwhelmed the news that home prices rose in January.
The latest UK manufacturing data indicates that expansion was slower than expected for January. While the UK economy showed an expansion of manufacturing activities, the expansion wasn’t as good as expected, and that has many speculating that the Bank of England will continue to keep interest rates low.
Home prices in the United Kingdom rose by 0.3 per cent in January over the data in December, but that wasn’t enough to help the sterling. Instead, there are concerns that inflation won’t be enough to justify an interest rate increase anytime soon. The pound is lower as a result of the prospect of extended easing in the form of lower interest rates. Additionally, the BOE hasn’t backed off on its asset purchase program.
At 16:16 GBP/USD is down to 1.6324 from the open at 1.6430. EUR/GBP is up to 0.8284 from the open at 0.8206. GBP/JPY is down to 165.1400 from the open at 167.5550.
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