Sydney 00:00:00 Tokyo 00:00:00 London 00:00:00 New York 00:00:00
real time forex news and technical analysis

Guess what, a depreciating currency does not bring an increase in GDP as UK shows

GBPUSD News by Allie Longford on 10:03 August 01, 2019 EST

The pound is hitting multi years lows against the world's main currencies yet the Bank of England just downgraded its forecast for UK growth.

The UK's central bank kept interest rates unchanged at 0.75% while downgraded its outlook for the economy growth for this year to 1.3% and also cut its forecast for growth in 2020 to 1.3%, from a previous projection of 1.6% on Thursday. The Bank of England says that economic forecasting, is particularly tricky right now as it stated "Increased uncertainty about the nature of EU withdrawal means that the economy could follow a wide range of paths over coming years.

The BoE said its central forecasts were distorted by the fact that although it continues to assume a smooth Brexit, the financial market prices that underpin its calculations increasingly reflect the risk of a no-deal Brexit. The new forecasts are intended to resolve this tension.

The pound seems on course to achieve parity against both the US dollar and the Euro. It is worth remembering that just a decade ago one pound would get you two dollars.