Sterling has fallen against the dollar today after a dovish quarterly inflation report from the Bank of England cut growth forecasts and left the door open to further QE.
The Bank lowered GDP forecasts for 2012 from 1.2% to 0.8%, with growth then rising to around 2.7% in two years' time. CPI inflation is expected to trend towards the 2% target later this year, but may not hit that level until 2013, the Bank's forecasts now suggest. GDP growth this year is expected to be impacted by a number of factors, including the extended public holiday in June. Bank of England governor Mervyn King said the forthcoming extra Bank Holiday for the Queen's Jubilee would knock around 0.5 percentage points off Q2 GDP, but suggested the effect of the London Olympics would...
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