Investing.com - The pound fell to the day’s lows on Thursday after the Bank of England elected to keep interest rates on hold at record lows in a unanimous vote and also cut its forecasts for economic growth.
GBP/USD hit lows of 1.4550 from around 1.4594 ahead of the announcement.
The BoE held the key interest rate at the current low of 0.5%, as lone hawk Ian McCafferty dropped his call for a rate hike for the first time in six meetings.
The bank said economic conditions have deteriorated in three months since its November quarterly inflation report, noting that the U.K. economy is not growing as fast as expected.
“Global growth has fallen back further over the past three months, as emerging economies have generally continued to slow and as the US economy has grown by less than expected,” the bank said.
It now expects U.K. gross domestic product to increase by just 2.2% this year, down from 2.5% three months ago and cut its forecast for 2017 to 2.3%, down from 2.6%.
The bank expects inflation to remain below 1% through 2016, longer than previously thought, but it is then expected to pick up to just above 2% in two years' time.
Sterling was also lower against the euro, with EUR/GBP advancing 0.88% to 0.7675.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.52% to three month lows of 96.74.
The dollar fell sharply on Wednesday after weak U.S. service sector data and dovish Federal Reserve comments added to doubts over how much the Federal Reserve can raise interest rates this year.
The Institute of Supply Management reported that activity in the U.S. services sector slowed to a near two-year low in January.
New York Fed President William Dudley said the weakening outlook for the global economy and any further strengthening of the dollar could have "significant consequences" for the health of the U.S. economy.
Investors were looking ahead to Friday’s U.S. nonfarm payrolls report for January for fresh indications on the strength of the labor market.