MPC voices fears over sterling strength

The MPC said, however, that substantial headwinds to economic recovery remain, and that sterling could hinder the rebalancing of the economy. The minutes of the meeting held on 9 and 10 January warned: "Substantial headwinds to recovery remained, including the drag to activity from fiscal consolidation, a further squeeze in household real incomes, and the deterioration in UK competitiveness over the past couple of years. "Indeed, the existence of a significant current account deficit at a time of subdued activity and spare capacity suggested that the sterling real exchange rate might ...