The British pound slipped to a four-week low against the dollar on Wednesday morning after investors were left disappointed following the Bank of England’s (BoE) inflation report.
The U.K. central bank left its growth and inflation forecasts broadly unchanged, meaning a rise of its main benchmark rate is still expected in the first half of 2015. This surprised markets and a recent run-up in the currency quickly reversed after the release. Sterling fell to $1.6757 after trading higher for much of the session and peaking at $1.6874.
BoE Governor Mark Carney played down expectations of an earlier-than-expected rise in interest rates at a press conference following the report. He said that a hike would depend on the degree of slack in the U.K. economy, and the prospects for its absorption.