Bank of England will cut interest rates to 2.5% at the Dec 4 policy meeting

Pound Sterling Exchange Rate Outlook : GDP fell 0.5% in Q3 from Q2, the fist drop in 16 years, although as expected. Consumer spending led the way, down 0.2% (the most since 1995) and fixed investment fell a whopping 2.4%. On the year-over-year basis, consumer spending rose 1.1%, though. This is the least since 1995 but not negative. The GDP report results in revisions to previously reported data like industrial production, now seen down 1.1%, and manufacturing, down 1.3%, in both cases worse than –1% initially reported. Construction fell 0.7%, less bad than -0.8% in the initial report.

Bloomberg points out that unemployment rose at the fastest pace in 16 years in Oct and jobless benefits are being paid to the highest number of people since 2001, while inflation fell the most in 11 years (to 4.5%). Therefore, the BoE will cut rates to 2.5% at the Dec 4 policy meeting, according to the consensus forecast.

Pounds to Euros 1.1905
Pounds to Dollars 1.5348
Pounds to Australian Dollars 2.3440

Bye For Now

Barbara Rockefeller
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