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Pound Under Pressure

GBP has experienced continued pressure over the past 48 hours due to weak economic data ramping up the calls for the Bank of England to cut interest rates in their next policy meeting.

According to reports, more than half of the members of the Bank’s Monetary Policy Committee are ready to back a rate cut. This has led to GBP falling by 2.2% since the turn of the year and is now on its longest decline in eight months.

Lower than expected December inflation figures for the U.S. have provided further support for The Fed Reserve to keep interest rates unchanged at least for the next 12 months.

Continued under performance for inflation in the U.S. economy (not being comfortably above the 2% mark) has led to suggestions The Fed could go another decade without any further Interest Rate Hikes.

ECB officials including Francois Villeroy de Galhau believe the euro economy is starting to regain its footing, suggesting monetary policy can at least stay on hold for now.

This comes after a series of positive data releases for the Euro-Zone since the New Year in Retail Sales, Inflation, Industrial Production, as well as unemployment in the Euro-Zone being close to record lows. 

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