Super Thursday: Sterling declines as BoE cuts growth forecasts and warns on household incomes

Held rates at 0.25%

Laura Dew
clock • 2 min read

Sterling has retreated from early gains after the Bank of England cut UK growth forecasts and warned households' disposable income will decline next year, while the Monetary Policy Committee (MPC) voted to hold rates at 0.25%.

In its quarterly Inflation Report, the Bank cut its UK growth forecast to 1.7% for this year, down from 1.9% previously, while growth is now tipped to slow to 1.6% in 2018, down from a previous forecast of 1.7%. As a result, the pound has fallen by 0.4% against the US dollar to $1.31670, having earlier rallied to a new 11-month high of $1.3267 on the back of the possibility of a shock interest rate rise on Thursday. Similarly, sterling is down against the euro, immediately plunging after the Bank's release. It is now trading at €1.1126, a 0.28% fall. The Bank also warned household ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

UK ups defence spending to 2.6% of GDP by 2027 as billions pledged

UK ups defence spending to 2.6% of GDP by 2027 as billions pledged

Chancellor delivered Spending Review

Sorin Dojan
clock 11 June 2025 • 4 min read
Chancellor to pledge billions to 'invest in Britain's renewal' in Spending Review

Chancellor to pledge billions to 'invest in Britain's renewal' in Spending Review

Rachel Reeves to unveil Spending Review later today

Linus Uhlig
clock 11 June 2025 • 1 min read
Five years on from Covid: What's next for markets?

Five years on from Covid: What's next for markets?

It is now five years since the start of the UK’s Covid lockdown. Since then, we have seen considerable market and geopolitical-related change. Here, William Marshall looks back over the past five years and also explores what we might expect from markets...

William Marshall
clock 06 May 2025 • 4 min read