A poor day for sterling saw it lose ground across the board as the Bank of England (BoE) suggested that UK inflation and economic growth could remain below expectations for a prolonged period. However, the most significant movement was seen during the inflation report hearing when BoE Governor Carney warned that UK interest rates were set to remain low ‘for some time’.
Also sterling’s cause was not helped by positive German business climate data released in the morning or better-than-expected economic growth figures from the US which showed growth through the previous quarter of 2.1% against an expected 2.0%, pushing sterling close to the seven-month low seen earlier in the month against the US dollar.
The main event of the day here in the UK is the Chancellors autumn statement where, given the Conservatives have a parliamentary majority, he will start to implement their long stated goal of reducing public expenditure. It could cause a lot of turbulence for sterling.
Otherwise it is a quiet day for UK data and therefore attention shifts again to the US, where core durable goods orders and unemployment claims data could apply more pressure to an already struggling sterling.