Britain’s pound skidded to a two-week low this morning amid doubts over the outlook for Bank of England interest rate moves and concerns over Brexit.
Sterling has been pushed lower this week by a combination of weak data and comments from BoE policymakers that markets have interpreted as dovish.
Although investors are pricing in an 80 percent chance of a first 25 basis-point interest rate hike will come at the Bank of England’s next policy meeting on Nov. 2, doubts are growing about future rate hikes.
Retail sales volumes, a key component of the economy, fell 0.8 percent in September, dragging quarterly growth to its weakest annual rate since 2013, data showed on Thursday, raising concerns that the economy was too weak to stomach a rate hike, a first since 2007.
Bank of England (BoE) Deputy Governor Jon Cunliffe said on Thursday it was not clear that rates needed to rise soon, showing at least two of the central bank’s nine policymakers are unlikely to vote for a hike in November.
An interesting few weeks coming up for the pound.