The Pound fell against a basket of currencies following the Bank of England’s Super Thursday. GBP/EUR is now trading in the mid 1.18’s down nearly a cent since trading begun.
MPC members voted against a change in monetary policy, which came as no surprise given that prior to this update, Mark Carney had downgraded growth forecasts for 2017.
However now it would seem the tables have turned once again, during the Quarterly inflation report, Carney has pointed to higher inflation to come.
This year will be “a more challenging time for British households” and “wages won’t keep up with prices”, he said.
Carney also pointed out that any forecasts are subject to change and depend entirely on the sort of Brexit that will play out in the weeks and months ahead.
Investors lose confidence in the Pound
A number of other economic releases came out today which further dented the Pound’s position. Both Manufacturing and Industrial production highlighted a slowdown in these sectors and the NIESR inflation report halved its expectations for growth.
With little UK economic data for the remainder of the week, investors will be drawn to German GDP figures and the US Retail sales due out tomorrow.