Sterling stumbles as rate frozen
The pound struggled during the last 24 hours, as indications that growth is slowing and sings that of a rate cut in the near future emerged.
The dollar stood at 1.7716 to sterling, while the euro was at 1.4567 this morning.
Yesterday the Monetary Policy Committee (MPC) kept the interest rate on hold as predicted, but there is a growing belief rates will be cut in the coming months.
The National Institute of Economic and Social Research said today that industrial output was at a four-month low as third quarter growth was put at 0.3 per cent.
The rate marks a dip on the 0.5 per cent growth in the three month up to August.
"These growth figures are weaker than had been expected at the time of the Bank of England's August interest rate cut, and if this pace of growth continues, further reductions must be likely," the NIESR commented.
The Bank of England left interest rates on hold at 4.5 per cent for the second month running on Thursday, after a quarter percentage point cut in August.
But many analysts say a weakening economy may prompt the Bank to cut borrowing costs again in the coming months, despite inflation being well above its 2.0 percent target.
"Nevertheless, the Bank has to keep an eye on the inflationary pressures associated with the oil price increases and this may limit its capacity to cut interest rates," NIESR said.