It followed sharp falls on Thursday evening after the Bank of England Governor drew attention to 'mixed data' on the UK economy
The pound continued to fall against the dollar on Friday morning as markets reacted to Governor of the Bank of England Mark Carney’s comments casting doubt on an interest rate rise in May.
Sterling slipped 0.3 per cent to $1.4047 and was also 0.15 per cent down against the euro at €1.1394.
It followed sharp falls on Thursday evening after Mark Carney drew attention to “mixed data” on the UK economy revealed this week. The BoE governor said he didn’t want to be “too focused on the precise timing” of when rates might next rise and that the UK should “prepare for a few interest rate rises over the next few years.”
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Pound sterling slumps after Mark Carney casts doubt on May rate hike
Traders had priced in a high likelihood that the BoE’s Monetary Policy Committee would raise rates next month.
“I don’t want to get too focused on the precise timing, it is more about the general path. The biggest set of economic decisions over the course of the next few years are going to be taken in the Brexit negotiations and whatever deal we end up with. And then we will adjust to the impact of those decisions in order to keep the economy on a stable path,” said Carney.
Earlier this week the pound hit its highest level against the dollar since the EU referendum in June 2016 but inflation came in lower than expected while retail sales figures and wage growth also disappointed.
Mr Carney described the data as “mixed”.
“On the softer side some of the business surveys have come off. Retail sales have been a bit softer – we are all aware of the squeeze that is going on in the high street. We’ll sit down calmly and look at it all in the round.”
The MPC meets on 10 May to decide whether or not to move the benchmark interest rate from 0.5 per cent.