Bank of England’s reluctance to cut its benchmark interest rate, which at 5.75%, remains the highest among the world’s major currencies. However, many economists feel the case for a rate cut is growing stronger every month, whether or not the Bank of England is willing to acknowledge it. Inflation is only moderately high, while the fall in housing prices-exacerbated by a prolonged period of tight money-threatens to drag down the entire economy. The markets are still pricing in a rate cut by year-end, which would surely drag down the Pound should it obtain. Dow Jones Newswires reports:
“We strongly suspect that market pessimism in this respect will continue to grow, in reverse proportions to its expectations of a further hike in U.K. interest rates,” said…a senior currency strategist.Read More: Sterling’s Strength Can’t Last Much Longer
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