UK Office for Budget Responsibility (OBR) sharply lowered its growth forecast for the UK economy, sending Pound to near two-week lows against the USD.
OBR now sees GDP growth in 2016 at 2% from November’s 2.4%, and 2.2% 2017 from the previous 2.5%.
Inflation forecasts were trimmed as well. 2016 CPI forecast now stands at +0.7% vs. +1.0% forecast in November. 2017 CPI is seen at +1.6% vs. +1.8% in November.
Meanwhile, UK Gilts rallied after George Osborne revised down borrowing forecasts for this year and said the government is on track to achieve a budget surplus by 2020.
(Market News Provided by FXstreet)