STERLING yesterday fell to within a hair’s breadth of the 2018 low it had recorded on Tuesday against the dollar, as worries over the UK’s Brexit negotiations and reduced expectations of interest-rate rises weighed.
The pound fell as far as $1.3453 yesterday, only marginally above a low of $1.3452 on Tuesday.
The Bank of England’s Monetary Policy Committee last week held UK base rates at 0.5 per cent, following a raft of weak economic data. The Bank last week cut its forecast of UK growth this year from 1.8% to 1.4%.
In early April, a rise in rates at the MPC’s meeting last week had been viewed by some economists as a near-certainty. Financial market players have reviewed their rate-rise forecasts because of the weak economic figures.
At 5pm in London yesterday, the pound was trading around $1.3478, down 0.32 cents on its close on Tuesday.
A report from Bank of England agents around the UK, published yesterday, noted companies’ “investment intentions remained modest, reflecting continued uncertainty around Brexit”.
Michel Barnier, the European Union’s chief negotiator on Brexit, said this week that “little” progress had been made since March.
Figures published late last month by the Office for National Statistics showed the UK economy grew by just 0.1% in the first quarter. The National Institute of Economic and Social Research think-tank last week estimated UK gross domestic product in the February to April period would have been up just 0.1% on the preceding three months.
Official data yesterday showed UK productivity, in terms of output per hour worked, fell 0.5% quarter-on-quarter in the opening three months of 2018.
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