The British Pound Sterling, on Wednesday, July 12, hit a two-week low against the dollar and deepened a fall to its lowest in 8 months against the euro on Wednesday after Bank of England Deputy Governor Ben Broadbent said he was not yet ready to raise interest rates.
Sterling dipped around a quarter of a percent to as low as $1.2815. It weakened similarly to 89.49 pence per euro, its lowest since Donald Trump’s election as U.S. President last November.
“It is definitely trading on a softer footing after this news,” said Lee Hardman, an analyst with MUFG in London.
“For anyone who had any expectation of an August hike – that is clearly looking very unrealistic now, although he does reinforce that they are moving towards a hike. That will help keep alive expectations for a move later this year.”
The swing by several external members of the Bank’s Monetary Policy Committee, as well as chief economist Andy Haldane, towards backing a rise in rates has propped the pound up in the past month at a time of high political uncertainty.
Sterling fell back to as low as $1.26 in the two weeks after Prime Minister Theresa May surprisingly lost her parliamentary majority last month, but it remains some 10 cents above lows hit in a flash crash last October.
Many economists say the UK economy is far from ready to deal with higher interest rates and data continues to weigh against the pound, Reuters reports.
Manufacturing, construction and industrial output all fell in May – in contrast to expectations of a rise – and another batch of weak wage numbers in a labour market report due at 0830 GMT would be liable to add to losses for the pound.
