Bank of England minutes today
23 May, 2012
Today could be a difficult day for the Pound, with both the Bank of England’s monthly minutes out and also UK retail sales. Both are widely expected to weigh heavily on Sterling, with the minutes quite likely to reveal the Bank of England are considering a further round of Quantitative Easing (printing more money) and retail sales expected to be down in all series from previous months.
The head of the IMF was in the UK for our annual review yesterday, and announced that while she was supportive of the UK’s austerity plans, growth needs to be higher before the current low levels become entrenched and she suggested interest rate cuts might be the solution, despite the UK having the lowest interest rates ever.
These worries have caused the US Dollar rate, together with many other Sterling pairings to drop further, and unless the GDP revision tomorrow shows a turnaround from the “double dip” news of a month ago, this is likely to continue.
The Pound is managing to hold its own against the Euro though, having dropped from the 3.5 year highs in the last few days, and has even come up slightly this morning. But this is very much due to negativity towards the Euro and will likely be tested if today’s news is bad.
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