The British pound has had a disastrous start to the trading week after a double dose of bad news, which guarantees the Bank of England will keep rates on hold next week and according to some maybe longer.
Industrial production figures released yesterday hit the market at -0.8 percent against analysts’ expectations for a figure of 0.2 percent while the manufacturing production figures fared even worse coming in at -1.4 percent against expectations for a figure of 0.3 percent.
This was followed up by wage growth figures today which also disappointed the market and adds evidence that the UK economy is not as in good shape as earlier expected.
"This data could fuel Bank of England concerns and uncertainties over the economy and there can be very little doubt that the Monetary Policy Committee (MPC) will leave interest rates unchanged at their June meeting next week," said Howard Archer, chief economic advisor to the Ey ITEM Club.
"The data also makes an August interest rate hike by the Bank of England look a lot more questionable," he added.
The troubles with the British pound may intensify as the British parliament take a crucial vote on the amendments which were introduced by the house of lords regarding the Brexit vote.
If the parliament fail to overcome the changes by the lords speculation is rife that Prime minister Theresa May will be forced to resign as Prime Minister which will throw the UK government into chaos and as result the British pound will see much bigger losses as the chances of hard Brexit and no deal with the EU become a reality.
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