British Pound Strengthens on BOE Inflation Report, Growth and Inflation Expectations Fall - 8.8.2012

The British pound found support at 1.5572 versus the greenback and jumped higher after the Bank of England Governor King Inflation Report. King reported that inflation is more likely to be below the target of 2% for much of the time. The UK growth forecast was cut due to euro-area crisis and as appreciation of Sterling against the Euro reduces UK exports as well as government spending cuts set further pressure on GDP growth. “The outlook for UK growth remains unusually uncertain” the King stated, also said that the negative growth is expected to continue for the remainder of 2012, but stronger real incomes together with stimulus program could help economic activity to pick up. Furthermore, Consumer Spending is expected to increase due to falling inflation. The Sterling against the US dollar jumped from 1.5572 to 1.5660 in the last hour after BOE Inflation Report or advanced by 0.58%. The Euro sank against the British pound from 0.7945 to 0.7890, in other words dropped by 0.69%.