Pounds slides before Bank growth forecast

Speculation the Bank of England will lower its economic growth forecasts has caused the pound to slump in afternoon trading.

Sterling weakened against both the dollar and euro on speculation the Bank will lower its growth forecast when it releases its inflation report tomorrow, reports Bloomberg. Reversing earlier gains, the pound declined against most of its major peers - despite upbeat data showing retail sales and house prices rose last month. The pound fell 0.2%to $1.6377 in afternoon trading in London, nearing yesterday's three-week low. Earlier this month, the Bank held the base rate at its record low of 0.5% amid fears the economic recovery is failing to gather momentum.