GBP Faces Pressure with Inflation Rate at 4-year’s Low
GBP Faces Pressure with Inflation Rate at 4-year’s Low
May
21st from WikiFX News. Britains inflation rate dropped to the lowest
since August, 2016, raising speculations that the Bank of England will
have to take further measures to boost demand.To get more news about WikiFX, you can visit wikifx official website.
In addition, Britan‘s CPI grew 0.8% year-on-year, lower than
economists’ expectations. The figure may kindle an even more heated
debate over whether the central bank should introduce negative interest
rate for the first time.
HSBC downgraded its forecast of GBP/USD
before the end of the year from the previous 1.35 to 1.2, while pointing
out the risks including Britains fiscal well-being(as the worst of G10
members) and Brexit: euro is expected to rise from 0.81 to 0.87 against
pound before the end of the year, the British government again dismissed
the possibility of extending the Brexit transitional period, while it
seems unlikely for the two sides to completely settle a free trade deal
before the end of 2020.
With Britain sinking into a severe
recession and the economy in sluggish recovery, structural factors may
further weigh on the pound.
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