Bank of England cuts growth forecast

9 August, 2012

Graham Harborne

A poor day for the GB Olympians yesterday with no medals won at all but we did see a good day for the pound despite a rather disheartening inflation report.

The inflation report and accompanying speech by Mervyn King saw an initial rise in GBP as he put rest fears to further interest rate cuts citing that this was likely to have a negative effect on many financial institutions and he felt any such move would be ‘counter productive’. Having said that with growth forecasts being poor for the remainder of the year and cut for the years ahead it seems we could be on the brink of seeing the pound fall in the coming months.

So far this year we have seen the pound benefitting greatly from the eurozone crisis which appears to have gone from bad to worse over the last few months. Having said that, with the ECB president Mario Draghi claiming he will do whatever it takes to ensure Europe recovers don’t be surprised if we see the euro pushing on within the next few months if investors believe that Draghi will be true to his word.

With just Trade Balance data out today markets should be relatively quiet but tomorrow we have a batch of inflation data released which could lead to further falls in the pound. Tonight we see the much anticipated round 2 clash of Bolt and Blake, the fastest men on the planet. Though at Currency Index we are not quite as quick as the Jamaicans on the track in Currency terms by contacting us we can quickly secure you rates of exchange protecting against any losses that GBP may incur over the following days.