Wednesday, November 11, 2009

Sterling falls sharply after BoE's King comments

Sterling fell to session lows against the dollar and the euro on Wednesday after Bank of England governor Mervyn King said a weak pound would help the UK economy rebalance towards exports. The comments [ID:nBOE002098] came after the latest quarterly Inflation Report showed UK inflation will be below target in two years time if interest rates rise gradually from the middle of next year as financial markets expect. However overall the Monetary Policy Committee saw broadly balanced risks of inflation being above or below their 2 percent target by late 2011, suggesting little immediate need for more quantitative easing.

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