Despite Mr King’s optimism on the UK’s economic recovery, Sterling continued to slip against both the US Dollar and Euro as markets struggled to digest the Bank of England’s desire to hold the door wide-open for further stimulus and tolerate higher inflation to maintain price stability
Since the turn of the calendar year Sterling has now dropped 6 per cent against the Euro and 4 per cent against the US Dollar, which the Bank noted as a contributing factor in today’s higher inflation figures.
Guest post by Phil McHugh, Trading Director at Currencies Direct
With the Bank Governor gambling on an eventual fall in prices and an improvement in external demand, we should brace ourselves for the Pound continuing to plummet this winter, with it being at least until late-spring before we see any signs of it blooming again.
Further reading: GBP/USD weekly forecast.
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