Breaking News

Sterling drops after BoE cut growth forecasts

News Date: 4/2/2016 09:25:00
Sterling nursed losses versus most of its rivals after the Bank of England cut its growth forecasts in respond to global trade and financial risks. The bank expects growth to slow down to 2.2% this year and 2.3% next year, down from 2.5% and 2.6% respectively in November. Inflation forecasts were also cut down, with Britain's prices expected to grow less than 1% for the whole of 2016, longer than expected.

Additionally, Ian McCafferty, a voting member of the rate-setting committee, joined his colleagues unexpectedly to vote to keep interest rates unchanged at the record low of 0.50%, after voting to raise it every time since August, making it a nine versus zero decision, and highlighting the extended period it might take for the bank to raise the rates in such an unfavorable environment.

Sterling tumbled to a two-week low against the euro at 0.7699, before scaling a bit back to 0.7670, still down a hefty 0.85% for the day. The pound hit a week low versus the yen at 170.63, down a similar 0.82%. It dipped 0.11% against the dollar to 1.4588.

Oil prices engaged in very volatile trading today, teetering back and forth, with U.S. crude futures trading last at $32.76 a barrel, up half a dollar, or 1.50%. Brent crude futures were more muted, advancing just six cents, or 0.17% to $35.07 a barrel.

European shares jumped at the open, before sliding back on worries over Britain's growth and oil prices volatility. The pan-European index FTSEurofirst 300 slumped to a two-week low at 1,280, down 1.17% on the day. Germany's DAX tumbled 135 points, or 1.43% to 9,298, while France's CAC 40 retreated forty points, or 0.90% to 4,193. Britain's FTSE on the other hand jumped half a percent on the prospect of less monetary tightening in the future, trading last at 5,863.

Latest news

The dollar fell broadly on Monday after a difficult week, after more Chinese cities, including financial hub Shanghai and Urumqi in the far west, announced easing restrictions related to Covid-19, wh
12-2022 05 03:14:06

After the speeches delivered by Federal Reserve Chairman Jerome Powell, announcing that the interest rate will rise by 50 points instead of 70 points, gold prices rose by more than 2% to reach levels
12-2022 02 03:06:59

US Federal Reserve Chairman Jerome Powell announced the decision to slow the rate of interest rate hikes, starting in December, and stated that inflation is still very high, and that interest rates w
12-2022 01 02:57:28

The dollar fell from the highest level in a week on Wednesday, before a speech by the Chairman of the Economic Reserve, Jerome Powell, and became hovering near its lowest level in a month, and the ma
11-2022 30 04:50:47

Stocks in the United States closed lower at the end of yesterday’s trading, after the Chinese protests against the policies of Covid 19 raised economic concerns, to accompany the shares indices
11-2022 29 01:22:11

More News