07/02/2018 - Sterling Extends Losses Ahead of BoE Decision - 07/02/2018
Sterling resumed its fall on Tuesday, hitting two-week lows against a stronger dollar. The pound found some support as invesotors are wary of over selling the pound before this week’s Bank of England meeting. The pound has been weighed down by this week’s surveys confirming the poor shape of Britain’s economy and fresh tensions over its divorce negotiations with the European Union.
Economic growth is likely to slow to 0.3 percent in the first quarter, down from 0.5 percent in the last three months of 2017, financial data firm IHS Markit said. The European Union’s Brexit negotiator Michael Barnier called on the British government to clarify what it expected its relationship with the EU to be after Britain leaves in March 2019.
While the BoE is expected to leave interest rates unchanged, many analysts are expecting an interest rate rise in May - especially after BoE Governor Mark Carney recently sounded a more upbeat tone on the economy.