Sterling/Euro rates have dropped to around the €1.17 mark this morning, due to comments by one of the Bank of England (BoE) Monetary Policy Committee (MPC) members warning of further stimulus. He was quoted in the Times saying that the bank rate could be cut further towards 0% and also warning that QE stimulus could be stepped up.
While this was expected anyway, the fact one of the MPC members have repeated the warning increase the chances of it happening. If you look at the chart below, you can see the rate dropping away as early editions of the newspaper became a little after midnight last night:
Also this morning we have the UK’s latest Industrial and Manufacturing production figures for June. These were a little worse than expected and hasn’t helped the Pound either. Later this afternoon at 3pm we’ll see the latest Gross Domestic Product (GDP) from the NIESR. This is only an estimate of growth over the last 3 months, and the official number will come out in around 1 month from now. It will still be closely watched as an indicator of how the economy is faring. Last time the number was 0.6% and I think the markets are expecting this to drop away. If it’s a low number then the Pound could slide further.
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