The pound lost ground against its major rivals in European deals on Thursday after the Bank of England kept its key interest rate at a record low again and signaled that borrowing costs would remain unchanged through next year as it cut its forecast for near-term inflation.
The Monetary Policy Committee headed by Mark Carney voted 8-1 to hold the interest rate at 0.50 percent, the bank said in a statement.
At the November meeting, Ian McCafferty sought an increase in the Bank Rate by 25 basis points, as seen in August, September and October.
Policymakers voted unanimously to maintain quantitative easing at GBP 375 billion.
The bank expects the economy to grow 2.7 percent this year and 2.5 percent in 2016. The growth is then projected to improve to 2.7 percent in 2017.
In the August report, the bank had projected 2.8 percent growth for 2015 and 2.6 percent next year.
Inflation is projected to pick up over the coming months, but less quickly than projected in August, BoE noted. The central bank estimated CPI inflation to rise to 0.4 percent in December, and to 0.7 percent in March 2016.
In other economic news, survey data from the Lloyds Banking Group’s Halifax division revealed U.K. house prices rebounded at a faster than expected pace in October.
House prices increased 1.1 percent in October from a year ago, reversing a 0.9 percent drop in September. Economists had forecast only a 0.6 percent increase for October.
In the Asian session, the pound was steady against yen, dollar and the euro. Against the Swiss franc, the pound trended higher.
In European trading, the pound depreciated 0.76 percent to hit a 1-week low of 1.5265 against the dollar, compared to 1.5382 hit late Tuesday in New York. The pound is seen finding support around the 1.515 level.
Data from the Labor Department showed that first-time claims for U.S. unemployment benefits rose more than expected in the week ended October 31st.
The report said initial jobless claims climbed to 276,000, an increase of 16,000 from the previous week’s unrevised level of 260,000. Economists had expected jobless claims to inch up to 262,000.
The pound, having advanced to a 2-1/2-month high of 1.5352 against the Swiss franc at 2:45 am ET, reversed direction and fell to a 2-day low of 1.5201. The pair was worth 1.5276 when it finished Wednesday’s trading. The next possible support for the pound may be found around the 1.51 mark.
Survey data from the State Secretariat for Economic Affairs showed that Swiss consumer confidence improved less-than-expected in October.
The consumer confidence index came in at -18 compared to -19 in the July quarter. Economists had expected the index to rise to -17.
Reversing from an early 2-1/2-month high of 0.7042 against the euro, the pound dropped by 1.2 percent to a 2-day low of 0.7127. Continuation of the pound’s downtrend may take it to a support around the 0.72 region. At yesterdays close, the pair was worth 0.7061.
Figures from Eurostat showed that Eurozone retail sales decreased unexpectedly in September after remaining flat in the previous month.
Retail sales edged down 0.1 percent month-over-month in September, confounding economists’ expectations for a 0.2 percent increase.
The pound weakened to a 2-day low of 185.99 against the Japanese yen, off early 1-1/2-month high of 187.69. If the pound extends slide, it may challenge support around the 184.5 area. The pound-yen pair ended Wednesday’s deals at 186.98.
Looking ahead, Federal Reserve Bank of Atlanta President Dennis Lockhart will speak at the Joint Central Bank Conference in Bern at 1:30 pm ET.
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