Investing.com – The pound was trading close to a one-month low against the U.S. dollar on Wednesday, after the Bank of England cut growth and inflation forecasts and indicated that further monetary stimulus may be necessary as the economic outlook deteriorates.
GBP/USD hit 1.5740 during U.S. morning trade, the pair’s lowest since October 20; the pair subsequently consolidated at 1.5743, shedding 0.49%.
Cable was likely to find support at 1.5680, the low of October 20 and resistance at 1.5826, the days high.
In its quarterly Inflation Report, the BoE said it now believes economic growth will be "significantly weaker" than it did in August, with the biggest threat posed by the debt crisis in the euro zone.
The report said the BoE now sees a strong chance that annual growth rates will be below 1% throughout 2012 and indicated that it may have to add to its GBP275 billion asset purchase program.
The central bank also said it expected inflation to fall to 1.3% in two years time, adding that it expects inflation to fall below its 2% target by the end of 2012.
The report came after official data showed that the unemployment rate in the U.K. jumped to a 15-year high of 8.3% in October, while the number of people without a job on the wider ILO measure rose to a record high.
Meanwhile, the number of people claiming jobless benefit rose by 5,300 last month, far below analysts' forecasts of a rise of 20,400.
Elsewhere, concerns over the ability of European leaders to stem the region’s debt crisis pressured the yields of core euro zone economies, with the yield on French 10-year bonds briefly rising to a euro-era high earlier, before falling back.
The pound was also lower against the euro, with EUR/GBP rising 0.20% to hit 0.8574.
Also Wednesday, official data showed that U.S. industrial production rose more than expected last month, climbing 0.7%, beating expectations for a 0.4% increase.
A separate report showed that the U.S. consumer price index was down for the first time in four months in October, slipping 0.1%. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
Excluding food and energy costs, consumer prices rose 0.1% in October, broadly in line with expectations, after rising by 0.1% in September.
GBP/USD hit 1.5740 during U.S. morning trade, the pair’s lowest since October 20; the pair subsequently consolidated at 1.5743, shedding 0.49%.
Cable was likely to find support at 1.5680, the low of October 20 and resistance at 1.5826, the days high.
In its quarterly Inflation Report, the BoE said it now believes economic growth will be "significantly weaker" than it did in August, with the biggest threat posed by the debt crisis in the euro zone.
The report said the BoE now sees a strong chance that annual growth rates will be below 1% throughout 2012 and indicated that it may have to add to its GBP275 billion asset purchase program.
The central bank also said it expected inflation to fall to 1.3% in two years time, adding that it expects inflation to fall below its 2% target by the end of 2012.
The report came after official data showed that the unemployment rate in the U.K. jumped to a 15-year high of 8.3% in October, while the number of people without a job on the wider ILO measure rose to a record high.
Meanwhile, the number of people claiming jobless benefit rose by 5,300 last month, far below analysts' forecasts of a rise of 20,400.
Elsewhere, concerns over the ability of European leaders to stem the region’s debt crisis pressured the yields of core euro zone economies, with the yield on French 10-year bonds briefly rising to a euro-era high earlier, before falling back.
The pound was also lower against the euro, with EUR/GBP rising 0.20% to hit 0.8574.
Also Wednesday, official data showed that U.S. industrial production rose more than expected last month, climbing 0.7%, beating expectations for a 0.4% increase.
A separate report showed that the U.S. consumer price index was down for the first time in four months in October, slipping 0.1%. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
Excluding food and energy costs, consumer prices rose 0.1% in October, broadly in line with expectations, after rising by 0.1% in September.